Hold Rating on CrowdStrike Holdings Amid High Valuation and Balanced Risk/Reward Scenario

Shrenik Kothari, an analyst from Robert W. Baird, maintained the Hold rating on CrowdStrike Holdings (CRWD – Research Report). The associated price target remains the same with $460.00.

Shrenik Kothari has given his Hold rating due to a combination of factors influencing CrowdStrike Holdings. The company is facing challenging annual recurring revenue (ARR) and revenue comparisons for the fiscal year, with expectations set high by investors despite a lower consensus for net-new ARR. Although there is confidence in a rebound in the second half of the year, the current valuation is considered stretched, and embedded expectations are high.
Additionally, while CrowdStrike’s platform adoption is improving with initiatives like Flex, and federal traction remains strong, there are potential headwinds related to procurement friction and macroeconomic caution. The company’s valuation is significantly above historical averages, demanding near-perfect execution to meet expectations. These factors contribute to a balanced risk/reward scenario in the near term, leading to the Hold rating.

In another report released on May 15, Mizuho Securities also downgraded the stock to a Hold with a $435.00 price target.

Based on the recent corporate insider activity of 115 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of CRWD in relation to earlier this year.