- Morgan Stanley downgraded CrowdStrike (CRWD) shares to ‘equal weight’ due to stock valuation concerns.
- The stock dropped 5% in the past week after reaching resistance at $513.
- Analysts see limited short-term growth, but expect continued sales increases averaging 22% over the next year.
- Target price was raised slightly from $490 to $495, with volatility remaining high.
- Forecasts predict possible highs up to $575 and a median price of $500 over the next 12 months.
Morgan Stanley analysts downgraded CrowdStrike (CRWD) stock to an ‘equal weight’ rating on Monday. The analysts cited valuation as the main reason for the change, noting that the stock has surged 50% from its April lows. This followed a 5% drop in value over the past week, after shares struggled to rise above $513.
Keith Weiss, an analyst at Morgan Stanley, wrote in a report that “CrowdStrike remains a long-term market leader in Cybersecurity, well positioned for the increasing platform consolidation we expect in the industry, with direct exposure to AI tailwinds.” He added that due to the recent run-up in share value, the near-term opportunity is now “fully priced in.”
Other analysts matched this view, with Piper Sandler’s Rob Owen also moving CRWD to a ‘neutral’ rating from ‘overweight’ last week, citing the stock’s peaking potential. Since last month’s earnings release, the stock is down about 1%, although analysts’ earnings estimates have generally increased. The next earnings report, due this month, is expected to bring further clarity.
According to forecasts, CrowdStrike’s estimated profit for fiscal 2026 may decline by 10%, before improving by 33% in fiscal 2027. Average sales growth is expected to reach 22% over the next four quarters. The cybersecurity sector overall, including Cloudflare, has experienced strong gains in 2024.
Despite the downgrade, Morgan Stanley raised its target price for CrowdStrike slightly, from $490 to $495. The stock has been volatile, moving more than 5% on 17 occasions in the past year. Based on CNN analyst projections, CrowdStrike could set a new all-time high near $575, though the median forecast sees shares returning to around $500 within the next year.
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