CrowdStrike Stock Downgraded: Should Investors Be Worried?
The downgrade of CrowdStrike is a valuation call, Piper Sandler says. Here's what you need to know.


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
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.
-
Stock Market Today: Stocks Climb More Walls of Worry
Volatility is back in a normal range, and the trend for the main equity indexes remains positive despite specific and general headwinds.
-
How Capital One Venture X's Travel Perks Make the Fee Worth It
Travel Cards Travel cards, like the Capital One Venture X come with a sizable annual fee. Here are four ways to offset it.
-
Stock Market Today: Stocks Climb More Walls of Worry
Volatility is back in a normal range, and the trend for the main equity indexes remains positive despite specific and general headwinds.
-
Is It Time to Invest in Europe?
Stock Market Europe is being shaken out of its lethargy, militarily and otherwise, by Donald Trump's changes in U.S. policy. Should investors start buying?
-
Two Estate Planning Issues You Should Never Overlook
This estate planning attorney explains why proper asset titling and beneficiary designations make a big difference when it's time to transfer your wealth.
-
The Four D's That Could Force You to Sell Your Business
Business owners (or their heirs) can be rushed into a sale of their company if they haven't planned for a major change in circumstances — or the four D's.
-
Stock Market Today: Nasdaq Outperforms as Big Tech Rallies
The Dow Jones Industrial Average closed lower for a second day as Amgen and Merck fell.
-
The Three Retirement Tax Issues I Nag My Clients About
A financial professional highlights areas of tax planning that retirees should have on their radar as they finalize their retirement plan.
-
Do You Need Disability Insurance? Three Things to Know
Disability insurance can help replace some of your income during unexpected life events. Here are the basics, courtesy of a financial professional.
-
Stock Market Today: UnitedHealth Drags on Dow After CEO Splits
UNH created headwinds for the price-weighted Dow on news that its embattled CEO, Andrew Witty, is stepping down.