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CrowdStrike (CRWD) stock forecast: Can it halt the slide?

By Rob Griffin

Edited by Jekaterina Drozdovica


Updated

POZNAN, POL - FEB 6, 2021: Laptop computer displaying logo of CrowdStrike Holdings, an American cybersecurity technology company based in Sunnyvale, California
CrowdStrike (CRWD) stock forecast: Investing in cybersecurity Photo: monticello / Shutterstock.com

US cybersecurity company CrowdStrike (CRWD) has seen its stock price plummet from just below $200 to $150 today (10 May) in less than a week.

It had risen sharply in March on the announcement of solid fourth quarter results and optimistic guidance for the coming year. Sentiment turned in mid April and the decline gatherered momentum into May.  

The California-based company, whose products aim to stop breaches, ransomware and other cyber-attacks, is seen as a leading name in the endpoint security space.

Can its stock price recapture the momentum or will increasing competition slow its progress? Here we take a look at what factors are driving the CrowdStrike share price forecast.

CrowdStrike price performance

CRWD stock is down nearly 30% this year, from $198 at the start of January to $143 as the market closed on 9 May, 2022. It’s 24% down on its $186.62 level a year ago, although 2021 was quite a rollercoaster for the stock and the last five months particularly tough.

The price rose 67% between March and November before it was affected by the general antipathy towards growth stocks.

Overall, the share price had increased substantially in recent years. In fact, it’s 157% up on the $58.79 level it was back when Covid-19 lockdowns started in March 2020, as seen on the CRWD stock chart below. 

CrowdStrike stock, 2019 - 2022

In terms of CrowdStrike technical analysis, the short-term sentiment on the stock was bearish at the time of writing (10 May). A relative strength index (RSI) reading of 27.88 was in undervalued territory. A move of 30 or below could indicate that the stock is undervalued and there is a likelihood of a trend reversal.

Latest results revel losses

In the most recent CrowdStrike Holdings news, the company announced total revenue of $1.45bn for the year ended 31 January 2022 – a 66% increase on the $874.4m in the previous year. Subscription revenue came in at $1.36bn, which represented a 69% increase over the $804.7m figure for 2021.

However, the GAAP (Generally Accepted Accounting Principles) net loss was $234.8m, compared to $92.6m in 2021. This meant the GAAP net loss per share, basic and diluted, was $1.03, compared to $0.43 in fiscal 2021. 

As far as the fourth quarter fiscal 2021 was concerned, CrowdStrike reported total revenue was up 63% to $431m from $264.9m the previous year. 

Annual Recurring Revenue (ARR) was up 65% year-over-year and grew to $1.73bn as of 31 January, 2022, of which $216.9m was net new ARR added in the quarter.

However, the GAAP net loss was $42m, compared to $19m in the fourth quarter of fiscal 2021. GAAP net loss per share, basic and diluted, was $0.18, compared to $0.09 in the same period.

An “exceptional fourth quarter”

In a statement issued with the results, George Kurtz, the company’s co-founder and chief executive, expressed his delight at the achievement. 

“CrowdStrike once again delivered an exceptional fourth quarter and capped off a record year, achieving new milestones across both the top and bottom line,” he said.

Kurtz highlighted how the net new ARR of $217m in the quarter was a new all-time high, driven by “expansion of our leadership in the core endpoint market”, as well as a record quarter for cloud, identity protection and Humio.

“As our record results, growing scale and module adoption rates demonstrate, customers are increasingly leveraging the breadth and depth of the Falcon platform as they look to transform their security stack,” he added.

Burt Podbere, CrowdStrike’s CFO, insisted the company’s “durable platform model and powerful innovation engine” had translated into a truly differentiated offering and strong momentum heading into fiscal year 2023.

Crowdstrike stock forecast 2022-2025

The stock was rated as a ‘buy’, based on the views of 27 analysts compiled by MarketBeat at the time of writing (10 May). An overwhelming 26 gave it this rating, with one suggesting it’s a ‘hold’.

The consensus 12-month CRWD stock price target meanwhile came in at $267.92, which represented a 77% upside over its $143 level at the close on 9 May 2022.

The highest of the CRWD stock predictions was $339 and the lowest expected was a fall to $180.

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19,588.90 Price
-0.850% 1D Chg, %
Long position overnight fee -0.0263%
Short position overnight fee 0.0041%
Overnight fee time 21:00 (UTC)
Spread 1.8

BTC/USD

67,038.90 Price
+4.960% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00

Gold

2,399.13 Price
-1.920% 1D Chg, %
Long position overnight fee -0.0198%
Short position overnight fee 0.0116%
Overnight fee time 21:00 (UTC)
Spread 0.60

ETH/USD

3,526.78 Price
+2.820% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 6.00

The fourth quarter results triggered an increase in the analyst activity, with ten ratings a day after the announcement. These included Morgan Stanley, which upgraded the stock to ‘equal weight’, and Barclays, which boosted the price target from $250 to $255.

While analysts rarely provide forecasts beyond 12 months, algorithm-based forecasting site Wallet Investor, suggested that CRWD stock is a “very good long-term investment” that is expected to rise to $192 over the coming year.

At the time of writing, the site predicted the stock could then fall to $172 by May 2025 and fall further to $167 at the same point the following year in May 2026.

The CRWD stock prediction for 2027, meanwhile, put the stock down to $163. The site did not forecast as far ahead as 2030.

Analyst views on CRWD stock forecast

Mark Cash, senior equity analyst at Morningstar, has recently raised the fair value estimate for the company to $225 a share, up from $200.

This was after its fourth-quarter results “topped our lofty revenue growth and earnings expectations”, and the company provided robust fiscal 2023 guidance.

“Even with CrowdStrike shares soaring by 14% in after-hours trading to $193, we still see marginal upside for investors,” he said. “Our increase is spurred from expecting higher growth alongside margin expansion as we expect CrowdStrike to gain in an outsize manner from various trends.”

According to Cash’s CrowdStrike stock analysis, the company will continue landing customers at a rapid rate as organisations move away from legacy endpoint protection solutions.

“The company also benefits from a heightened threat environment with a larger attack surface brought up by remote work and organisations using more cloud-based resources, a skills gap within cybersecurity driving demand for CrowdStrike’s managed security, and its professional services being called upon for breach remediation assistance,” he added.

Is CrowdStrike a good stock to buy?

According to Danni Hewson, financial analyst at AJ Bell, there’s no getting away from the fact it’s a growth stock.

This means it’s been out of favour with investors nervous about tightening monetary policy, she believes, which is why shares are down 22% since last November’s highs.

“However, warnings that companies need to do more to protect themselves from cyberattacks has made some investors think again about the potential of CrowdStrike and its competitors,” she told Capital.com.

“The world runs online and keeping it running smoothly requires constant attention and innovation.”

This makes the stock attractive. “CrowdStrike is a leader in a market that’s mushrooming, and though its likely trading will remain volatile over the next year, long-term there’s plenty to consider,” she added.

What does CrowdStrike Holdings do?

CrowdStrike provides products and services aimed at protecting organisations from cyberthreats.

The company’s Falcon platform is powered by the CrowdStrike Security Cloud, which correlates trillions of security events every day, according to its website.

These include indicators of attack and threat intelligence from across custom endpoints, workloads, identities and IT assets.

Using “world-class” artificial intelligence, it then “creates actionable data” and “identifies shifts in adversarial tactics” to automatically prevent threats.

“With our Falcon platform, we created the first multi-tenant, cloud native, intelligent security solution capable of protecting workloads across on-premise, virtualised, and cloud-based environments running on a variety of endpoints such as laptops, desktops, servers, virtual machines, and Internet of Things (IoT) devices,” it stated.

Note that price predictions can be wrong. Forecasts shouldn’t be used as a substitute for your own research. Always conduct your own due diligence before investing. And never invest or trade money you cannot afford to lose.

FAQs

Is CrowdStrike (CRWD) stock a buy, a sell or a hold?

The stock was rated as a ‘buy’, based on the views of 27 analysts compiled by MarketBeat at the time of writing (10 May). An overwhelming 26 gave it this rating, with one suggesting it’s a ‘hold’.

Note that forecasts may not materialise and shouldn’t be used as a substitute for your own research. Always conduct your own due diligence before investing, and never invest or trade money you cannot afford to lose.

Will CrowdStrike stock go up or down?

The consensus 12-month CRWD stock price target meanwhile came in at $267.92, which represented a 77% upside over its $143 level at the close on 9 May 2022. The highest of the CRWD stock predictions was $339 and the lowest expected was a fall to $180.

Note that forecasts may not materialise and shouldn’t be used as a substitute for your own research. Always conduct your own due diligence before investing, and never invest or trade money you cannot afford to lose.

Does CrowdStrike pay dividends?

No, CrowdStrike doesn’t currently pay a dividend.

Markets in this article

CRWD
CrowdStrike Holdings Inc (Extended Hours)
302.03 USD
-44.06 -12.800%

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