What happened
CrowdStrike Holdings (CRWD +1.38%) was one of the more lucrative cybersecurity stocks to own on the last trading day of the week. The company's stock rose by over 6%, trouncing the S&P 500 index's 1.5% gain, following a glowing review in a new analyst note.
So what
Said note was authored by Cantor Fitzgerald's Jonathan Ruykhaver, who initiated coverage on four cybersecurity stocks after market hours on Thursday. Besides CrowdStrike, this lineup includes CyberArk Software, Cloudflare, and Fortinet. All received overweight (buy) recommendations save for Cloudflare, which was tagged with a neutral.
Of the four, CrowdStrike saw the biggest price pop today. The analyst's price target on the shares is $240, suggesting potential upside of 26%.
In his note, Ruykhaver wrote that CrowdStrike offers "more than a niche tool, in that we also see an evolving cloud-native platform that enables rapid innovation and the ability to quickly expand into new security adjacencies."
The analyst sounded particularly impressed by the company's retention rate, i.e. the degree to which it can maintain paying clients. According to Ruykhaver's findings, CrowdStrike's net retention rate consistently runs at over 120%. What helps greatly is the attractiveness of the add-on modules the company is continuously developing.
NASDAQ: CRWD
Key Data Points
Now what
CrowdStrike certainly presents a compelling investment case, especially since it is a well-regarded company operating in a cyberscape that remains dangerous. While Ruykhaver's price target is high relative to the stock's current level, it's entirely believable that this leading cybersecurity business could keep growing sufficiently to justify it.
