Crowdstrike: Analysts get bullish on cybersecurity
They prevent entire companies from going bankrupt — that’s what the F#@ they do.
Companies and governments are losing sleep about cyberattacks. Who can blame them as hacks grow more dangerous and prevalent? But there’s a bright side. These developments have analysts excited about the industry’s prospects (and one company in particular).
Everyone is getting hacked
Cyberattacks have ramped up significantly these last few years, with numerous high profile hackings crippling US infrastructure:
- Last year, the US government faced a high-profile pipeline hacking, resulting in a $4.4 million ransom payment.
- The 2021 SolarWinds hack inserted malware into 18,000 entities — compromising 100+ corporations and 9 US federal agencies.
Last month, the SEC proposed changes to improve reporting standards, requiring public companies to report cybersecurity procedures and policies regularly.
Governments and business leaders are prioritizing cybersecurity:
- In a study of 3000+ executives, 53% agree cybersecurity threats are higher this year, with 61% increasing their tech investments.
- Cybersecurity concerns will likely soar after the Russian invasion of Ukraine (BBG).
CrowdStrike is on analysts’ minds
CrowdStrike (NASDAQ:CRWD) provides cloud-based endpoint security — with a diverse product offering that detects and prevents cyberattacks. CRWD is a major player in the cybersecurity space — servicing 65 of the fortune 100 companies and 15 of the world’s largest 20 banks.
Its stock fell 45% from its November peak amid a challenging tech environment, along with growth and valuation concerns — but has bounced back 31% on a wave of momentum in the past month:
- Government adoption: Last week, the US defense department authorized CrowdStrike to work at Impact Level 4 — launching its technology into the public sector.
- Higher anticipated revenue: At the same time, the company raised its annual revenue forecast from $3B to $5B by 2026 (Barron’s), exciting analysts.
Investors: What gets analysts going?
Investors and institutions agree on one thing: a bullish outlook on CrowdStrike. RBC analyst Matthew Hedberg believes a healthy cybersecurity demand justifies higher revenue projections in the coming years.
- Mizuho analyst Gregg Moskowitz praised CrowdStrike’s increasingly diverse product lineup, setting a price target of $270 (12.5% upside from its close yesterday).
- Stifel analyst Brad Reback praised the company’s operational efficiency — believes it can technologically outpace smaller companies.
Goldman was the latest to upgrade $CRWD with a price target of $281. A 600K worker shortage in US cybersecurity impacts the industry. Still, it helps to attract talent when analysts are mighty bullish on your stock.