CrowdStrike (CRWD) stock trading lower in Tuesday's session after financial services firm Piper Sandler downgraded the cybersecurity stock to Neutral (the equivalent to a Hold) from Overweight (the equivalent to a Buy).
CRWD stock has been one of the best stocks on the price charts so far in 2024, up nearly 54% for the year to date through the July 1 close. This includes a rally of over 10% since it was announced last month that CrowdStrike would be joining the S&P 500. CRWD's addition to the broad-market index became official on June 24.
However, Piper Sandler analyst Rob Owens thinks the company has become so large that "meaningful upside will likely become more difficult as the law of large numbers should begin to weigh on overall growth rates for the security leader – which could cause returns to lag other names in the space," according to Morningstar.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
As such, Owens now sees the stock as a Hold with a $400 price target, which implies upside of just over 4% to current levels.
"We are optimistic about the company longer term as well as the opportunity, just not the stock over our 12-month investment horizon," Owens said.
CrowdStrike is still a Buy for most of Wall Street
The majority of Wall Street remains bullish toward the cybersecurity stock, suggesting investors shouldn't be too worried about Piper Sandler's downgrade of the name.
According to S&P Global Market Intelligence, the average analyst target price for CRWD stock is $402.53, representing implied upside of about 4.5% to current levels. Additionally, the consensus recommendation is a Strong Buy.
Financial services firm Argus Research is one of those with a Buy rating on CRWD stock.
"We see CrowdStrike, with its focus on next-generation cybersecurity, as a strong competitor in the highly fragmented enterprise cybersecurity market," Argus analyst Joseph Bonner wrote in a June 7 note.
"In our view, CrowdStrike software is competitive with the best choices on the market," the analyst adds, saying the opportunity is strong for CRWD to "expand its business to the nearly 50% of companies that have not yet upgraded from traditional antivirus software, and to take advantage of both the secular growth in cloud workloads and the increasingly diabolical and toxic cyber-threat environment."
Related Content
-
Cord Cutting Could Help You Save Over $10,000 in 10 YearsHow cutting the cord can save you money and how those savings can grow over time.
-
The '8-Year Rule of Social Security' — A Retirement RuleThe '8-Year Rule of Social Security' holds that it's best to be like Ike — Eisenhower, that is. The five-star General knew a thing or two about good timing.
-
Cord Cutting Could Help You Save Over $10,000 in 10 Years
How cutting the cord can save you money and how those savings can grow over time.
-
Should I Buy Stocks or Should I Buy Bonds Right Now?Generally speaking, stocks provide reasonable growth while bonds provide stable income. Each play important roles in diversified portfolios.
-
You Were Planning to Retire This Year: Should You Go Ahead?If the economic climate is making you doubt whether you should retire this year, these three questions will help you make up your mind.
-
Are You Owed Money Thanks to the SSFA? You Might Need to Do Something to Get ItThe Social Security Fairness Act removed restrictions on benefits for people with government pensions. If you're one of them, don't leave money on the table. Here's how you can be proactive in claiming what you're due.
-
From Wills to Wishes: An Expert Guide to Your Estate Planning PlaybookConsider supplementing your traditional legal documents with this essential road map to guide your loved ones through the emotional and logistical details that will follow your loss.
-
Why Investing Abroad Could Pay OffCountries overseas are stimulating their economies, and their stocks are compelling bargains.
-
Are These the Next Stocks to Split?Interactive Brokers' recently split its stock to makes its shares more accessible to investors. Could these high-priced stocks be next?
-
Your Home + Your IRA = Your Long-Term Care SolutionIf you're worried that long-term care costs will drain your retirement savings, consider a personalized retirement plan that could solve your problem.
