We know that CrowdStrike (CRWD) has been fighting off a host of issues lately. Price target cuts from analysts, airline complaints, and so on have left this once-proud cybersecurity company with an egg on its face. However, it is fighting back, to the comparative delight of shareholders, who sent shares up fractionally in Wednesday afternoon’s trading.
CrowdStrike’s fighting back began when its president, Michael Sentonas, criticized competitors for using the July 19 service disruption to promote their own products, calling their actions both “shady” and “misguided.” While that might sound more like a value judgment than anything—and so subjective as to be useless—Sentonas noted that almost every other cybersecurity provider was in the same boat.
After all, Sentonas noted, the odds of something similar happening somewhere else were actually pretty good. No one could “technically” guarantee that it would not happen with their own software. Further, Sentonas noted that the cybersecurity industry runs on trust, and competitors pointing out CrowdStrike’s failures to promote their own brands would ultimately fail.
Merger Deal Falls Through
In a separate development, a recent merger deal between CrowdStrike and Action1 fell through due to concerns about being able to innovate properly after the deal closed. Action1 president and CEO Mike Walters pointed out that there was good reason to see “…M&A interest from various companies.”
However, Action1 is in a large market and may be able to make something big happen on its own, which it would not be able to do if it were bought out by a company like CrowdStrike. And given that the deal would have valued Action1 around $1 billion, Action1 may indeed be able to do something big in the future.
Is CrowdStrike a Buy or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on CRWD stock based on 30 Buys, six Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 76.18% rally in its share price over the past year, the average CRWD price target of $341.58 per share implies 26.47% upside potential.
