2024-07-23 06:43:00 ET
Summary
- An error in a Windows update caused a blue screen on 8.5mm machines, leading to a -23% drop in share price.
- CrowdStrike's incident should be seen as a temporary headwind, as the firm remains as the leading single-platform cybersecurity solution.
- I anticipate some headwinds at the top-line in q2'25; however, I do anticipate this just to elongate the sales cycle and expect CRWD to reach management's eFY25 revenue guidance.
CrowdStrike ( CRWD ) recently fell victim to the biggest risk of a SaaS company , an error in a regularly pushed update that led to 8.5mm Windows machines going blue screen. Though this incident has likely put a nasty taste in the investor community’s mouths, leading to a massive -23% drop in share price, I believe this decline is substantially overblown and should not be taken as a major operational risk. As such, this may lead to some customer attrition as Elon Musk almost immediately tweeted that he has deleted CrowdStrike from all systems; however, this completely undermines the technical advantages and capabilities of the Falcon platform and its competitive advantage over other cybersecurity platforms. I believe any headwinds posed by this error will be temporary, may shed some light in eq2’25 earnings, and inevitably be overlooked as a minor blip in time. I reiterate my STRONG BUY rating for CRWD with a price target of $387.73 at 18.75x eFY26 price/sales. Do bear in mind that my price target has declined from my pre-q1’25 target of $475/share....
Read the full article on Seeking Alpha
For further details see:
CrowdStrike's Sell-Off Offers A Strong Buying Opportunity