Shares of CrowdStrike (CRWD 2.03%) have surged to new highs this year, but analysts at HSBC think the cybersecurity specialist has more in the tank. The bank's financial services firm recently adjusted its price target to $411, representing an upside of 25% from the current share price of $329.
The firm initially rated the stock a buy in September when the shares traded around $165. Since then, CrowdStrike has reported solid growth as companies continue to view cybersecurity as a must-have in today's environment.
Is CrowdStrike a good long-term buy?
It's unclear exactly what prompted the price target raise, but Wall Street analysts are constantly adjusting price targets to reflect a stock's recent performance, and that's probably all that was going on in this case. Still, CrowdStrike has achieved strong, profitable growth that is deserving of a rising stock price.
Revenue grew 35% year over year in the October-ending quarter. Annual recurring revenue reached a record $3.15 billion, which shows the company gaining scale and all the benefits it accrues to profitability. Adjusted earnings per share more than doubled year over year to $0.82.
Image source: CrowdStrike.
Moreover, CrowdStrike said it achieved a perfect score in visibility, protection, and analytics detections in MITRE's testing. This explains a lot of the growth it is experiencing right now.
It's also notable that CrowdStrike reported accelerating growth in cloud security -- a market expected to reach $68 billion in value by 2028, according to MarketsandMarkets.
Investors should expect the stock to pull back at some point after a sharp rise. The shares do trade at an expensive valuation compared to others in the industry. But CrowdStrike is showing a lot of strength in a competitive field that makes it one of the best cybersecurity stocks to own for the long haul.
