According to Morgan Stanley, CrowdStrike outperforms its competitors. The bank upgraded the cybersecurity stock from equal weight to overweight and also named it a top pick. Analyst Meta Marshall also raised his price target to $510 per share from $487, suggesting a 17% upside. Despite its expensive valuation, Marshall believes CrowdStrike is best positioned to outperform in the coming years. He said this platform has the best chance of gaining market share and should benefit from AI tailwinds. CRWD 1Y Mountain CRWD 1Y Chart “With favorable AI positioning, growing adoption of emerging modules, and improving endpoint trends, (we) are elevating CRWD as a durable platform winner,” Marshall wrote. “While valuations are high, we believe the 20%+ top-line growth potential, improved margin/FCF profile and defensible moat are well justified.” CrowdStrike trades at a price-to-earnings ratio of 89x, well above the S&P 500’s expected multiple of 27.6x, according to FactSet. Analysts believe CrowdStrike’s subscription model, FalconFlex, could continue to act as a tailwind. “Recent stock price movements have created an opportunity, especially with Q4 earnings and the company’s recent appearance at the TMT conference reflecting renewed confidence in its positioning. As FalconFlex grows at an extraordinary rate (up 120% year-over-year in Q4), we see the stock price continuing to rise. The company sees ‘reflex’ entering the cycle sooner, and the endpoint business continues to serve as a top funnel driver.” Marshall praised the strong demand trends currently driving the cybersecurity industry. She believes CrowdStrike is the clear winner in platform integration and praised the company’s best-in-class management team. CrowdStrike’s stock has fallen 7% this year, caught up in the broader stock sell-off plaguing the software industry. But over the past 12 months, the stock has risen nearly 41%.
