CrowdStrike Stock Moves Lower As Analyst Warns Near-Term Upside Could Be Limited

Shares of cloud-based cybersecurity firm CrowdStrike Holdings Inc (NASDAQ:CRWD) are trading lower Monday following a downgrade from Piper Sandler.

What Happened: Piper Sandler analyst Rob Owens downgraded CrowdStrike from Overweight to Neutral and maintained a price target of $505, raising valuation concerns.

With CrowdStrike shares up about 47% year-to-date, the stock has reached Piper Sandler’s base and bull case target and the firm doesn’t see a near-term scenario that would cause it to meaningfully increase estimates.

“While our overall disposition towards the company and its longer-term opportunity as a security/IT consolidator remains favorable, we do not believe investors should be adding shares at this time as upside could be limited over the short- to medium-term,” Owens wrote in a note on Sunday.

The Piper Sandler analyst noted that the revised rating is a valuation call, similar to the update that came around the global outage las year. Although the analyst acknowledged that management has done an impressive job in rectifying the situation, Owens still believes there has been some residual impact to the business.

With near-term metrics likely somewhat capped due to a slowing in some core categories and federal uncertainty, the Piper Sandler analyst believes there is a level of asymmetric risk in CrowdStrike shares at the current share price.

“As we contemplate our $505 price objective, we do not expect to increase our expectations in material fashion nor increase our already group high multiple that would justify a significantly higher objective,” the analyst wrote.

CRWD Price Action: CrowdStrike shares were down 1.70% at $505.34 at the time of publication Monday, according to Benzinga Pro.

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