Shares of CrowdStrike (CRWD +2.97%) were moving higher today after the company got a bullish analyst note from Citigroup. The analyst built on earlier Wall Street comments that the company seems to have escaped the worst of the backlash that followed its July incident when a faulty software update shut down flights and banking operations, and disrupted other industries.
As of 11:11 a.m. ET, CrowdStrike stock was up 4.5% on the news.
Image source: Getty Images.
Wall Street thinks the worst is behind CrowdStrike
This morning, Citi was the latest Wall Street firm to issue a bullish rating on the stock following the Fal.Con conference earlier this week. Citi commended management's transparency on the earlier software update debacle and cited evidence of customer resilience, noting churn is lower than expected and the cybersecurity company has done a good job of maintaining its pricing.
Citi reiterated a buy rating on CrowdStrike with a $300 price target. While that implies just a 4% rise in the stock, the note is clearly a positive as CrowdStrike is still trading below where it was before the incident happened.
Earlier in the week, a number of other research firms, including DA Davidson, Evercore ISI, Jefferies, and Truist all reiterated buy ratings on the stock and said the customer backlash following the software incident had largely passed.
NASDAQ: CRWD
Key Data Points
Can CrowdStrike keep gaining?
It's certainly a good sign that CrowdStrike has survived the worst of the incident, but the stock is still expensive and growth was slowing prior to the outage.
If the company is truly back on track, the stock should move higher, but investors should be mindful of the valuation as its price-to-sales ratio was 20. Expect the volatility in the stock to continue.
