CrowdStrike Holdings, Inc. (CRWD) continues its forward momentum, significantly outperforming the S&P 500. The cybersecurity technology company’s stock rose by approximately 318.1% as of April 30, 2021, compared to the S&P’s gain of about 30.4% since the start of 2020. CrowdStrike also impressively climbed the WhaleWisdom Heatmap to a ranking of 5, up from 30.
CrowdStrike provides cloud-based workload and endpoint security for its customers, including services such as threat intelligence and cyberattack response. American businesses have experienced a push toward remote work and online collaboration during the Coronavirus pandemic. They have seen more applications moving to the cloud, contributing to a growing demand for CrowdStrike’s services.
Hedge Funds Are Buying
Fourth-quarter results showed that the aggregate 13F shares held by hedge funds increased to about 54.1 million from 49.9 million, an increase of approximately 8.5%. Hedge funds created 48 new positions, 88 funds added to an existing holding, 17 exited, and 50 reduced their stakes. Institutions were also buying the stock and aggregate holdings increased by about 7.6% to approximately 142.8 million from 132.7 million.
Positive Multi-year Estimates
Analysts predict earnings per share will rise in the coming years, increasing to $0.63 by 2023, up from $0.29 in 2022. Strong performance is anticipated to bring revenue to approximately $1.8 billion by 2023, up from $1.3 billion in 2022.
Analysts Are Bullish
Analysts are predominantly bullish on the stock, with most rating CrowdStrike a Buy. Berenberg Capital Markets analyst Joshua Tilton initiated coverage of CrowdStrike with a Buy rating and a price target of $260. Tilton cited the company’s superior technology and meaningful market opportunities. Similarly, Deutsche Bank analyst Patrick Colville gave CrowdStrike a Buy rating and a $265 price target, noting the rising rate of cloud adoption and the importance of cybersecurity.
While not all analysts raised price targets, they all appear to see CrowdStrike’s opportunities for continued market growth. JMP Securities analyst Erik Suppiger maintained an Outperform rating on the shares but lowered CrowdStrike’s price target to $265 from $295. While Suppiger acknowledged CrowdStrike’s momentum and business expansion opportunities beyond the endpoint security market, his price target adjustment reflected recent compression in valuation multiples across the market. Sterling Auty from JPMorgan Chase & Co maintained a Neutral rating on CrowdStrike’s shares but raised the firm’s price target to $210 from $205. Auty referenced cloud market opportunities and the company’s strategic decision to partner with Amazon Web Services Marketplace.
CrowdStrike continues to see growth and receives favorable feedback from analysts, many of whom view the company as a Buy with excellent market potential. The company is understandably closely followed by technology investors; it addresses the demand for protection against increasing cyber threats and has made strategic moves to expand its reach to consumers. Hedge funds are buying, and future estimates for 2022 and 2023 should be encouraging for investors.