As blunders go, you could say with some understatement that the one that occurred at CrowdStrike (NASDAQ:CRWD) between Thursday night and Friday morning was a fairly big one.
A software update related to the cybersecurity firm’s Falcon platform for Windows resulted in a global software outage issue that affected multiple business operations across the globe, from banking to healthcare, to governments and airlines, the disruption leading to blue error screens – BSOD (blue screen of death) – and causing chaos on a massive scale.
CrowdStrike CEO George Kurtz announced early on Friday that the issue had been identified and isolated and a fix has been installed, although it could take a while before all systems fully recover. The company also stressed its system had not been hacked or under attack.
That is some comfort, says J.P. Morgan analyst Brian Essex, who believes that while CrowdStrike will face a reputational challenge, it is crucial to understand that this was not a security breach and that customers should recover more efficiently than they would from a security incident.
“Just as important as the lack of security impact to customer systems, the company’s ability to recover will be contingent on the response from CrowdStrike which, so far, has been quick and appropriate, in our view,” Essex added.
As you would expect, CRWD shares took a bit of a beating in the subsequent session, seeing out Friday’s trading 11% into the red. While it could take a while for the stock to regain its footing, the pullback, says Essex, could provide investors with a “long-term buying opportunity with the stock under pressure and recovery expected ahead.”
Ultimately, Essex rates CrowdStrike shares an Overweight (i.e., Buy), along with a $400 price target, suggesting shares will rebound ~31% over the coming months. (To watch Essex’s track record, click here)
Essex is far from the only CRWD bull on Wall Street. In fact, barring one Hold and Sell, each, all 31 other recent analyst reviews are positive, making the consensus view here a Strong Buy. At $397.07, the average target is only slightly lower than Essex’s objective, and implies shares gains of 30% are in store for the next year. (See CrowdStrike stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
