What happened
Shares of CrowdStrike (CRWD 4.24%) rose 3.2% on Tuesday, following bullish analyst commentary.
NASDAQ: CRWD
Key Data Points
So what
Goldman Sachs analyst Brian Essex lifted his rating on Crowdstrike's stock from neutral to buy. He now sees its share price surging roughly 28% to $285, up from a prior estimate of $241.
Essex says Crowdstrike is experiencing "unprecedented demand" for its cloud-based security tools as the conflict in Europe stokes fears of sophisticated cyberattacks.
Image source: Getty Images.
Yet while demand for its services is booming, Crowdstrike's stock price has pulled back sharply along with many other growth stocks in recent months. Even after today's gains, Crowdstrike's shares have shed a quarter of their value since reaching highs near $298 in November.
That discount, combined with Crowdstrike's strong competitive position within the cybersecurity industry, makes its stock an attractive buy for investors, according to Essex.
Now what
CrowdStrike was already enjoying strong demand for its threat detection technology before war erupted in Europe. Its revenue soared 66% to $1.45 billion in fiscal 2021, which ended on Jan. 31. New subscriber additions and higher sales to existing customers helped fuel its impressive gains.
The midpoint of CrowdStrike's guidance calls for its revenue to grow an additional 48%, to $2.15 billion, in fiscal 2023. It's possible that its actual results could exceed that forecast if Essex is correct and companies ramp up their spending on cybersecurity in the coming months. His $285 stock price target, in turn, seems well within reach.
