On Tuesday, Truist Securities revised its price target for CrowdStrike Holdings (NASDAQ:CRWD), a leader in cloud-delivered endpoint protection, reducing it to $325 from the previous target of $400. Despite the significant cut in the price target, the firm maintains a Buy rating on the company stock.
The adjustment follows an incident on Friday when CrowdStrike released a Falcon sensor configuration that led to a major IT outage worldwide. This event resulted in the company's stock plummeting by approximately 30% in the last two trading sessions.
The Truist analyst pointed out that while the outage was due to a faulty software update rather than a cybersecurity breach, it might still affect the company's near-term results and has slightly tarnished its previously untouchable reputation.
The analyst believes that the fundamental demand for CrowdStrike's offerings will remain unimpacted over the long term. Nevertheless, the recent events have introduced some uncertainty into the company's outlook. Consequently, Truist has also revised its fiscal year 2025 and 2026 earnings estimates downward, alongside the price target adjustment.
CrowdStrike's recent outage is seen as a rare misstep for the cybersecurity firm, which has generally been known for its robust security solutions. The company's quick response to the incident and its strong market position may help mitigate the long-term effects of the outage.
In other recent news, CrowdStrike Holdings faced a significant global IT outage due to a software update, leading HSBC (LON:HSBA) to downgrade the cybersecurity firm's stock from Buy to Hold.
The large-scale outage disrupted numerous companies and industries worldwide, prompting HSBC to adjust its revenue and earnings estimates for CrowdStrike for the fiscal years 2025 to 2026.
Additionally, the company's CEO, George Kurtz, has been summoned by the U.S. House of Representatives Homeland Security Committee to discuss the outage that impacted approximately 8.5 million Windows devices globally.
Financial services firms Piper Sandler and RBC Capital also adjusted their price targets for CrowdStrike's shares in light of potential regulatory issues and legal challenges. Despite these developments, Cathie Wood's ARK ETFs showed continued investor confidence in CrowdStrike, purchasing 20,219 shares valued at $6,165,986.
These recent developments highlight the potential impacts of operational disruptions on market valuation and investor sentiment. As further details emerge, investors and clients are closely monitoring the situation. It's important to note that these are recent developments, and the full implications are yet to be determined.
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