CrowdStrike (NASDAQ: CRWD) stock saw one other big sell-off on this week’s trading. The company’s share price ended this week’s trading down 16% from last week’s market close, in accordance with data from S&P Global Market Intelligence.
Last Friday, CrowdStrike’s software was at the center of a serious IT outage — and the event has triggered big sell-offs of the company’s stock. The cybersecurity specialist’s valuation pullback continued this week as investors and analysts weighed the potential fallout of an important system failure for the business.
CrowdStrike’s update on the large IT outage hasn’t comforted investors
In consequence of a bug contained in an automatic update that CrowdStrike rolled out last Friday, tens of thousands and thousands of computers using Microsoft‘s Windows operating system were taken offline last week. CrowdStrike has emerged as a primary provider of endpoint device protection and other related cybersecurity services, but last week’s far-reaching IT meltdown has called the company’s systems, performance outlook, and valuation into query.
CEO George Kurtz provided an update on Thursday that said 97% of Windows sensors that had been taken down throughout the previous week’s outage were now working again. Unfortunately, the recovery hasn’t done much to assuage concerns amongst investors and analysts.
Analysts are cutting price targets on CrowdStrike
On Wednesday, Citigroup published a note on CrowdStrike maintaining a buy rating on the company’s stock. However, lead analyst Fatima Boolani lowered the firm’s one-year price goal from $425 per share to $345 per share. If CrowdStrike were to hit that focus on, it would represent upside of roughly 35% as compared with the company’s current share price. But Boolani also highlighted a risk that CrowdStrike could fall to as little as $170 per share.
In a note published Thursday, Barclays lowered its one-year price goal on CrowdStrike from $400 per share to $285 per share. Based on the cybersecurity specialist’s share price at today’s market close, that will imply upside potential of roughly 11%. While Barclays maintained an chubby rating on CrowdStrike stock, the dramatic downward revision for the price goal on the stock suggests that the outage will proceed to present substantial valuation headwinds.
In an optimistic scenario, Barclays thinks that CrowdStrike could climb back to $310 per share over the following 12 months. Nonetheless the firm also sees a risk that shares could fall to as little as $210 per share.
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Citigroup is an promoting partner of The Ascent, a Motley Idiot company. Keith Noonan has positions in CrowdStrike. The Motley Idiot has positions in and recommends CrowdStrike and Microsoft. The Motley Idiot recommends Barclays Plc and recommends the subsequent options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Idiot has a disclosure policy.
Why CrowdStrike Stock Plummeted Again This Week was originally published by The Motley Idiot