CrowdStrike (NASDAQ:CRWD) has become almost synonymous with the term ‘global IT meltdown’ after a major worldwide IT outage on July 19th. The disruption, caused by a faulty software update from the cybersecurity firm, wreaked havoc on systems across the globe.
As CrowdStrike gears up to release its fiscal second-quarter results today after the market closes, investors are eagerly awaiting insights into how this incident has affected the company’s performance.
Naturally, Truist analyst Joel Fishbein, who ranks among the top 3% of Wall Street stock experts, suggests that the fallout from this event is likely to have consequences.
“Considering the timing of the event, which was in the last 2 weeks of the quarter, we believe deals may have slipped into 3Q25 with added pressure to provide customers with concessions and discounts,” said Fishbein. “We expect the company to reset investor’s near-term expectations ahead of its September 18th Analyst day.”
In the short term, there’s a risk that customers may seek to be compensated in the form of refunds or discounts. More than a third of CrowdStrike customers who participated in Truist’s IT buyer survey mentioned they anticipate receiving compensation from the company due to the event.
Importantly, Fishbein points out that that these customers did not specifically indicate plans to pursue compensation through legal action. Nevertheless, headlines involving major clients like Delta could “pose additional risk to the stock from here.”
Despite the widespread economic damage experienced by companies (with one insurance carrier reckoning around $15 billion in global financial losses), Fishbein doesn’t think CrowdStrike will be held responsible for the entire economic impact claimed due to these outages, believing such an outcome would “pose a dangerous risk to national cybersecurity.”
On the brighter side, it seems customers are remaining loyal. Based on recent discussions with buyers and sellers in the cybersecurity space, Fishbein says that, in general, the “feedback that we received indicated to us that the high switching cost and perceived shortcomings of other solutions would lead customers to stay with CRWD.”
All things considered, Fishbein rates CRWD shares a Buy alongside a $325 price target, suggesting a 21% upside potential over the next year. (To watch Fishbein’s track record, click here)
As for the broader Street view, it’s predominantly Buy ratings from Fishbein’s colleagues – 29, to be precise – while the addition of 6 Holds and 1 Sell doesn’t detract from the Strong Buy consensus. With an average price target of $341.73, the shares are expected to trade at a ~30% premium a year from now. (See CrowdStrike stock forecast)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
