6. CrowdStrike Holdings Inc. (NASDAQ:CRWD)
Number of Hedge Fund Investors: 69
Jim Cramer pointed out that Morgan Stanley has expressed concerns about CrowdStrike Holdings Inc. (NASDAQ:CRWD)’s stock in the short term as the cybersecurity firm approaches its investor day on September 18. Analysts believe that Wall Street’s expectations for CrowdStrike Holdings Inc. (NASDAQ:CRWD) remain too high, despite the company recently lowering its full-year guidance due to the global IT outage in July. Nonetheless, Morgan Stanley has kept its buy-equivalent rating on the stock.
“Morgan Stanley is worried in the short term about CrowdStrike’s stock ahead of the cybersecurity firm’s investor day set for Sept. 18. Analysts said Wall Street estimates are still too high, even after CrowdStrike lowered full-year guidance late last month to reflect the impact of the global IT outage in July. Still, the firm maintained its buy-equivalent rating on the stock.”
In Q3 2023, CrowdStrike Holdings Inc. (NASDAQ:CRWD) exceeded expectations, showing strong demand for its cloud security and identity protection products. Despite a challenging macroeconomic environment, CrowdStrike Holdings Inc. (NASDAQ:CRWD) achieved notable profitability gains. CrowdStrike Holdings Inc. (NASDAQ:CRWD) is expected to grow its earnings by 28.14% annually over the next few years, surpassing industry averages. Revenue is projected to rise at an 18.12% annual growth rate, driven by increasing adoption of its cloud security, identity protection, and AI-driven solutions.
As a leader in endpoint security, CrowdStrike Holdings Inc. (NASDAQ:CRWD) is also expanding into areas like SIEM, CNAPP, and identity security, supported by its innovative AI and cloud technologies. Analysts are very positive, with price targets between $222 and $334.80, reflecting strong confidence in CrowdStrike Holdings Inc. (NASDAQ:CRWD)’s growth despite broader economic challenges.
Baron Fifth Avenue Growth Fund stated the following regarding CrowdStrike Holdings, Inc. (NASDAQ:CRWD) in its Q2 2024 investor letter:
“CrowdStrike Holdings, Inc. (NASDAQ:CRWD) is a cloud-architected SaaS cybersecurity vendor offering endpoint security, threat intelligence, and cyberattack response services. Shares continued their strong performance from the first quarter and were again a top contributor, rising 19.5% in the second quarter on better execution than peers in the broader security space.
The company reported strong quarterly results with 33% year-over-year revenue growth, driven by customers consolidating their cybersecurity spend on CrowdStrike with free cash flow margins reaching 35%. With accelerating market share gains in its core endpoint detection and response offering, emerging products including Cloud, Identity, and SIEM reaching material scale, and newer products in data protection and AI ramping quickly, net new annual recurring revenue and total revenue look to sustain a long duration of growth.
With its leading competitive positioning in cybersecurity, the growing threat landscape (which is also driven by the advancements in AI, making hackers more dangerous), its unique lightweight, single-agent, architecture, and its platform approach, we retain conviction in CrowdStrike, which is emerging as the security platform to beat in terms of scale, profitability, and free cash flow conversion.”
