On Wednesday, Rosenblatt adjusted its outlook on CrowdStrike Holdings (NASDAQ:CRWD), reducing the price target to $350 from the previous $420, while still holding a Buy rating on the stock. The revision follows a significant global IT outage attributed to a flawed software update from the cybersecurity firm.
The incident, which had widespread effects across various critical industries, has led to a reevaluation of CrowdStrike's financial projections for the fiscal years 2025 and 2026. The company's prompt action to address the issue included the deployment of a corrective update. Despite this swift response, the scale of the disruption is expected to have immediate consequences.
In the aftermath of the outage, CrowdStrike has shifted its focus to customer support and the remediation process. This reallocation of resources is anticipated to slow down the acquisition of new customers and extend the duration of sales cycles. These factors contribute to the potential for a short-term impact on the company's performance.
Adding to the concerns is CrowdStrike's recent 8-K filing, which indicates an ongoing assessment of the financial impact caused by the software update issue. This development has introduced a level of uncertainty that has been factored into the revised price target.
CrowdStrike's current situation underscores the challenges faced by IT companies when dealing with large-scale disruptions. The company's efforts to mitigate the fallout and its transparent communication with stakeholders through regulatory filings reflect its commitment to managing the crisis. The revised price target by Rosenblatt takes into account these recent events and their implications for CrowdStrike's financial outlook.
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