Morgan Stanley stated Monday that CrowdStrike shares can be added to portfolios in order to provide protection against the uncertain world. Analyst Hamza Fodderwala elevated the cybersecurity stock to overweight (from equal weight), noting that there is still demand for their services despite the worsening macroeconomic outlook. According to the analyst, the price target was raised from $195 per share to $215 per shares. This implies a upside of 32.6% compared with Friday’s close. Fodderwala stated in a note that CrowdStrike, a SaaS-based security platform of the next generation, is the most beneficiary of emerging secular trends in security. Due to the increasing cyber threat, security remains a priority and it is also one of IT’s most important areas. … CrowdStrike’s core Endpoint Detection & Response (EDR) platform is particularly mission critical, at the forefront of helping to defend against breaches.” He said that the reason we weren’t as positive about the name going into this year was because of growing competition risk and uncertainty over the pace at which topline growth will accelerate, along with the high expectations embedded within CRWD valuation. We have seen no signs that CrowdStrike has slowed down in its share gains momentum since then. There is also growing evidence to support this. [total addressable market]Their expansion outside of their main endpoint security market.” CrowdStrike’s shares fell 20.8% in the last year, as more growth-oriented companies are losing favor because of rising interest rates. Also, the stock has fallen more than 45% from its November record high. Fodderwala stated that this decline created an attractive entry point to investors. CrowdStrike isn’t just a bullish firm for Morgan Stanley. Stephens started coverage with CrowdStrike in late May. Stephens cited CrowdStrike’s strong cash flow and free cash flow.
