Four-star rated Stifel Nicolaus analyst Adam Borg has lowered the price target for the cybersecurity firm, CrowdStrike Holdings (CRWD), to $300 (24.5% upside) from $400 while retaining a Buy rating. The move comes ahead of the company’s fiscal Q2 earnings report, scheduled for August 28.
The price cut followed a major global tech outage on July 19, when a faulty update from CrowdStrike caused the “blue screen of death” for Microsoft (MSFT) users. This incident raised widespread concerns about the potential impact on CRWD’s upcoming results and sales pipeline.
Here’s Why Borg Remains Bullish on CRWD Stock
Despite the impact of the outage in the short term, Borg remains optimistic about CRWD stock. While he acknowledged that some customers faced delays or canceled deals with the company, many clients and partners took the incident as an operational error and appreciated the company’s transparency.
Importantly, the analyst is bullish about CRWD’s long-term potential due to its strong brand name and leading cybersecurity technology.
CRWD: Q2 Expectations
Wall Street analysts expect CrowdStrike to post Q2 revenue of $959.22 million, up 31.1% from $731.63 million reported in the prior-year quarter. Furthermore, analysts anticipate that CRWD will post earnings of $0.98 per share in Q2, up from $0.74 in the prior-year quarter.
It should be noted that CRWD stock is known to make large moves post-earnings. Interestingly, this time also, options traders are pricing a 12.91% move in either direction.
Is CrowdStrike a Buy or Sell?
Based on analysts’ consensus ratings, CrowdStrike stock is a buy ahead of Q2 earnings. It sports a Strong Buy consensus rating, reflecting 30 Buy, six Hold, and one Sell recommendations.
After a 25% decline in shares of the company in the past three months, the analysts’ average price target on CRWD stock of $355.63 implies a 47.63% upside potential from current levels.
