A software update from Nasdaq-listed cybersecurity giant, CrowdStrike (CRWD.US) possible caused global IT systems outage and some chaos in financial and flight sector. The stock market reacted accordingly, selling stock due to potential marketing loses and still-possible claim risk. Yesterday, analysts from Redburn Atlantic downgraded Crowdstrike share price target to $275 per share, from $380 before.
CrowdStrike CEO commented that "CrowdStrike is actively working with customers impacted by a defect found in a single content update for Windows hosts. Mac and Linux hosts are not impacted. This is not a security incident or cyberattack. The issue has been identified, isolated and a fix has been deployed (...) Our team is fully mobilized to ensure the security and stability of CrowdStrike customers.'
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile app- According to Redburn analysts endpoint protection market is maturing, while other growth markets like cloud, identity, and security information event management (SIEM) are highly competitive.
- They indicated that Crowdstrike valuation is high, despite signs of slowdown in the market it operates.
- Despite high quality products, according to Redburn 'the company faces challenges in penetrating the large enterprise market to maximize cross-sell opportunities'
- Crowdstrike 45% year-to-date gain has placed it at a demanding FY 2024 EV/sales multiple of 23x, more than double the cybersecurity peers group.
CRWD.US (D1 interval)
Current pre-market share price suggest test of the SMA200 (red line) at $280. Yesterday, stock tested SMA100 (black line).
Źródło: xStation5
CrowdStrike valuation and financial multiples
Looking at financial multiples we can see very high P/E ratio with forward P/E at 80x; those levels are really rarely to see. The company become profitable Q1 2023. The revenue growth and net earnings expansions is quite stable since then.
Source: XTB Research, Bloomberg Finance L.P.
Source: XTB Research, Bloomberg Finance L.P
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
