Take Advantage of the Current Rally in CrowdStrike

CRWD stock - Take Advantage of the Current Rally in CrowdStrike

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Concerns about cybersecurity have intensified following Russia’s invasion of Ukraine, and CrowdStrike (NASDAQ:CRWD) could see increased demand for its services. After a steep selloff late last year, CRWD stock is now rebounding.

CrowdStrike shares fell 45% between November and early March, dropping along with the broader market for technology securities. However, following the invasion, CRWD stock has rallied and is now up 1.4% on the year.

Analysts see further gains ahead. Among 28 professionals who cover CrowdStrike, the median price target on the shares is currently $275, implying a further 36.8% gain.

After Russia’s invasion of Ukraine, President Joe Biden issued a public warning about cyberattacks in March. He noted hackers are exploring ways to infiltrate and harm U.S. infrastructure and private sector companies. The president called on corporate America to “accelerate efforts to lock their digital doors.”

The presidential warning followed several high-profile cyberattacks on notable companies such as Microsoft (NASDAQ:MSFT) and Nvidia (NASDAQ:NVDA). In those cases, a 16-year-old hacker managed to breach the tech giants’ cyber defenses and steal sensitive information. The breaches, which garnered a lot of media attention, were a stark reminder of the importance of cybersecurity.

Even before recent events, demand for Austin, Texas-based CrowdStrike’s cybersecurity protection was increased. Fueled by growth in its threat detection technology, CrowdStrike’s revenue rose 66% to $1.45 billion in fiscal 2021, which ended on Jan. 31 of this year. New subscriber additions and higher sales from existing customers accounted for much of the gains.

Looking forward, CrowdStrike issued strong forward guidance for revenue in its current fiscal year, saying it expects to grow 48% to $2.15 billion. However, that guidance was issued before Russia’s attack elevated cybersecurity demand worldwide. The guidance provided by CrowdStrike may now prove to be too conservative.

While the stock market remains volatile and tech stocks continue to gyrate wildly, shares of CRWD stock appear to be bucking current trends. The combination of soaring demand and strong financial results make it a compelling option for investors looking for a technology stock that is actually rising this year. Things could change, but for now, CRWD stock is a buy.

On the date of publication, Joel Baglole held long positions in MSFT and NVDA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.  

Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.


Article printed from InvestorPlace Media, https://investorplace.com/2022/04/take-advantage-of-the-current-rally-in-crwd-stock/.

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