Why CrowdStrike Stock Dropped Again This Week

Crowd strike (NASDAQ: CRWD) The company’s shares saw another major drop this week. The company’s stock price ended the week down 16% from last week’s market close, according to data from S&P Global Markets Insights.

Last Friday, CrowdStrike’s software was at the center of a major computer outage, and the event triggered a sharp decline in the company’s stock. The cybersecurity specialist’s valuation has continued to slide this week as investors and analysts weigh the potential impact of the major system outage on the company.

CrowdStrike’s update on major IT outage fails to reassure investors

Due to a bug in an automatic update deployed by CrowdStrike last Friday, millions of computers running MicrosoftThe Windows operating system went offline last week. CrowdStrike has become a leading provider of endpoint protection and other related solutions cybersecurity servicesBut last week’s massive IT crisis has called into question the company’s systems, performance prospects and valuation.

CEO George Kurtz provided an update Thursday, saying that 97% of Windows sensors that were knocked out during the outage last week were working again. Unfortunately, the recovery did little to ease investor and analyst concerns.

Analysts Cut Price Targets on CrowdStrike

Wednesday, Citigroup The fund issued a note on CrowdStrike, maintaining its buy rating on the company’s stock. Separately, lead analyst Fatima Boolani lowered the company’s one-year price target to $345 per share from $425 per share. If CrowdStrike hits that target, it would represent about a 35% upside to the company’s current share price. But Boolani also noted the risk that CrowdStrike could fall as low as $170 per share.

In a note published Thursday, Barclays Barclays lowered its one-year price target on CrowdStrike to $285 per share from $400 per share. Based on the cybersecurity company’s stock price as of today’s market close, this would imply an upside potential of approximately 11%. While Barclays has maintained an overweight rating on CrowdStrike, the dramatic downward revision to the stock’s price target suggests that the outage will continue to present substantial valuation headwinds.

In an optimistic scenario, Barclays estimates that CrowdStrike could rally to $310 per share over the next year. But the company also sees the risk that the stock price could fall to as low as $210 per share.

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