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BMO still assessing financial impact of CrowdStrike's outage, reiterates stock PT

EditorIsmeta Mujdragic
Published 07/26/2024, 10:28 AM
CRWD
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On Friday, BMO Capital maintained its Outperform rating on CrowdStrike Holdings (NASDAQ:CRWD) with a steady price target of $410.00.

The firm's latest commentary highlighted ongoing assessments of the financial repercussions following a recent outage at CrowdStrike. Despite the lack of universal consensus, feedback from customers and channels has heightened concerns regarding the potential severity and lasting effects on the company's financial performance into FY25.

The firm is currently evaluating the depth of the impact, which pertains to the extent of the potential downturn, and the duration, indicating how long the subdued growth might persist. This analysis is crucial for developing financial scenarios in light of the service disruption. The analyst from BMO Capital noted the importance of customer and channel feedback in gauging the incident's implications.

As of now, BMO Capital has not altered its financial estimates for CrowdStrike. The decision to maintain the current projections comes as the firm continues its due diligence to fully understand the scope of this unprecedented event. The analyst emphasized that while the feedback collected thus far has been a mix, it has nonetheless raised the level of concern about the financial impact for the fiscal year 2025.

CrowdStrike, a cybersecurity firm, has experienced an outage that has drawn the attention of analysts and investors alike. The situation is being closely monitored to determine its influence on the company's financial health and growth trajectory.

In other recent news, CrowdStrike Holdings has recovered over 97% of its Windows sensors after a significant global outage due to a faulty software update.

The outage had far-reaching impacts, affecting approximately 8.5 million Windows devices worldwide, and causing disruptions across various sectors, including aviation, media, healthcare, and banking. The cybersecurity firm has since focused on remediation, using automatic recovery techniques and mobilizing all available resources to expedite the recovery process.

In response to the incident, CrowdStrike has introduced new measures in its quality control process to prevent a recurrence. Analyst firms Rosenblatt and Truist Securities revised their price targets for CrowdStrike, citing short-term challenges and potential impacts on the company's financial outlook. HSBC also downgraded CrowdStrike's stock from Buy to Hold, adjusting revenue and earnings estimates for the fiscal years 2025 to 2026.

The CEO of CrowdStrike, George Kurtz, has been summoned by the U.S. House of Representatives Homeland Security Committee to discuss the incident. Despite the challenges, CrowdStrike continues to work on bringing the remaining sensors back online.

These developments are recent, and their full implications are yet to be determined.

InvestingPro Insights

Amidst the recent challenges faced by CrowdStrike Holdings (NASDAQ:CRWD), including a significant outage that has impacted financial projections, it's important to consider various metrics and insights that might shed light on the company's current standing and future prospects. According to InvestingPro data, CrowdStrike boasts a substantial market capitalization of $61.98 billion, reflecting investor confidence in the cybersecurity firm's market position and potential for growth.

InvestingPro Tips suggest that CrowdStrike holds more cash than debt on its balance sheet, providing a cushion that may help the company navigate through the recent outage and its aftereffects. Additionally, analysts predict that the company will be profitable this year, which could reassure stakeholders about CrowdStrike's financial resilience and capacity for recovery.

However, the company's valuation multiples indicate a premium on its earnings and assets, with a Price/Earnings (P/E) ratio of 467.43 and a Price/Book (P/B) ratio of 24.67 as of the last twelve months ending in Q1 2023. Such high valuation multiples may reflect the market's high expectations of future earnings growth, despite the recent setbacks.

For readers interested in a deeper analysis, there are 17 additional InvestingPro Tips available for CrowdStrike, which can be accessed by visiting https://www.investing.com/pro/CRWD. To take advantage of these insights, use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, enhancing your investment research with valuable, in-depth data.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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