CrowdStrike Wows Analysts With Execution: 'Difficult Not To Be Impressed'

Shares of Crowdstrike Holdings Inc (NASDAQ: CRWD) were slipping Friday, giving back some of the strong gains they've notched since their June IPO.

The weakness has come despite the cybersecurity company's beat-and-raise second-quarter report Thursday. 

The Analysts

JMP Securities analyst Erik Suppiger reiterated a Market Outperform rating on CrowdStrike with a $90 price target.

Bank of America Merrill Lynch analyst Tal Liani reiterated a Buy rating and $103 price target.

Mizuho Securities analyst Gregg Moskowitz maintained a Buy rating and $105 price target.

JMP: CrowdStrike Is Attractively Valued

In its first full quarterly results as a public company, CrowdStrike sustained triple-digit annual recurring revenue growth thanks to accelerating new customer growth and sustained robust retention rates, Suppiger said in a note.

Gross margins exceeded the firm's estimate by 290 basis points, which helped improve operational efficiencies, the analyst said. 

The company is executing on its platform strategy, with 50% of customers buying four products are more, he said. 

"We view the company's ability to sell a broad solution as a reflection of its increasingly strategic value to customers and a validation of its significant differentiation." 

Notwithstanding the modest premium valuation, JMP believes the shares are attractively valued given the company's compelling fundamentals and its track record of sustaining triple-digit ARR growth.

See also: Analysts Weigh In On VMware Earnings, Buyout Deals

BofA: All Key Metrics Are In Right Direction

CrowdStrike is executing well, displacing endpoint providers and expanding the endpoint wallet share with customers, BofA's Liani said in a Friday note. 

All key metrics are improving, the analyst said. 

"We see consolidation of endpoint features as a major theme in security, and believe CrowdStrike is best positioned for the trend with its single-agent approach." 

BofA sees the traction with Amazon.com, Inc. (NASDAQ: AMZN)'s AWS and the Symantec Corporation (NASDAQ: SYMC) M&A uncertainty as other key positives, with the latter opening a key displacement opportunity in the market.

Citing CrowdStrike's strong third-quarter guidance and the better-than-expected fourth-quarter expectations, BofA raised its estimates.

To reflect recent weakness across peers, BofA reduced the valuation multiple from 35 times to roughly 33 times.

Mizuho: Difficult Not To Be Impressed 

The 20% retracement in the shares over the last two weeks render CrowdStrike stock even more attractive, Mizuho analyst Moskowitz said in a Friday note. 

" ... Despite a premium valuation, we expect that strong execution should propel CRWD's stock higher," the analyst said.

While noting that CrowdStrike is a high expectation stock, Moskotwitz said he finds it difficult "not to be impressed by these results."

The Price Action

CrowdStrike shares, which have jumped over 150% from its IPO price of $34, were last seen slipping 12.76% to $75.71 at the time of publication Friday. 

Related Link: CrowdStrike Hikes IPO Price Range