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.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free 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
-
Amazon Surge Sends S&P 500, Nasdaq Higher to Start November: Stock Market TodayAmazon inked a $38 billion cloud deal with OpenAI, which sent the stock to the top of the Dow Jones on Monday.
-
If You'd Put $1,000 Into Home Depot Stock 20 Years Ago, Here's What You'd Have TodayHome Depot stock has been a buy-and-hold banger for truly long-term investors.
-
Amazon Surge Sends S&P 500, Nasdaq Higher to Start November: Stock Market Today
Amazon inked a $38 billion cloud deal with OpenAI, which sent the stock to the top of the Dow Jones on Monday.
-
If You'd Put $1,000 Into Home Depot Stock 20 Years Ago, Here's What You'd Have Today
Home Depot stock has been a buy-and-hold banger for truly long-term investors.
-
Eight Steps to Help Get You Through the Open Enrollment Jungle at WorkWondering how to survive open enrollment this year? Arm yourself with these tools to cut through the process and get the best workplace benefits for you.
-
Seven Moves for High-Net-Worth People to Make Before End of 2025, From a Financial PlannerIt's time to focus on how they can potentially reduce their taxes, align their finances with family goals and build their financial confidence for the new year.
-
I'm a Financial Planner: These Are the Seven Tiers of Retirement Well-BeingLet's apply Maslow's hierarchy of needs to financial planning to create a guide for ranking financial priorities.
-
Why More Americans Are Redefining Retirement, Just Like I DidRetirement readiness requires more than just money. You have a lot of decisions to make about what kind of life you want to live and how to make it happen.
-
3 Major Changes Investors Must Prepare for in 2026A possible stock market bubble. Trump accounts. Tokenized stocks. These are just three developments investors need to be aware of in the coming months.
-
A Compelling Case for Why Property Investing Reigns Supreme, From a Real Estate Investing ProInvestment data show real estate's superior risk-adjusted returns and unprecedented tax advantages through strategies like 1031 exchanges and opportunity zones.
