The post-earnings theme for CrowdStrike Holdings, Inc. (NASDAQ: CRWD) was some serious profit taking that was frankly overdue. The data security provider’s self-inflicted software upgrade SNAFU from July took until the very end of November to get “back to even” for its stock. While good old-fashioned profit taking took 7% from its most recent high, the reality is that Wall Street is treating this as a temporary stay in Purgatory with new all-time highs expected in 2025.
Analysts had already raised targets ahead of earnings. The post-earnings reaction actually points to an even-stronger stock price recovery in 2025. Now the company just has to keep recovering and exceeding expectations.
Most analyst price targets are 12-month forecasts. Also keep in mind that CrowdStrike’s YTD stock performance was 35% even after the 7% post-earnings pullback. Before getting into what’s coming, or at least what is expected to come soon, CrowdStrike’s stock had fallen more than 40% from pre-crash to the trough. This damage vaporized $40 billion worth of a $90 billion market capitalization. Now investors have to ask if a 7% pullback from the recent high on the “back to even” trade needs fear or merits greed for new investors.
CrowdStrike’s November 26 earnings release confirmed what the bulls wanted to see. That’s $1 billion in quarterly revenues, showing growth despite the severe outage. Annual recurring revenues above the $4 billion mark now, and non-GAAP gross margin holding at 80%. The rest of its report is available if needed. Oggonomics does not issue detailed earnings recaps as there are already too many of those reports readily available.
What still stands out the most here is the flood of continued price target hikes after so many analysts had just hiked their targets ahead of earnings. This means that, despite a 7% pullback (after a 70% gain from the August lows), Wall Street’s stance is definitely leaning into its “strategic bull” position. The analysts who raised their targets again will simply be saying this 7% post-earnings sell-off is just more of a gift.
Oggonomics always reminds its readers and investors in general that no single analyst report should ever be the sole reason to buy or sell a stock. This is also true when an analyst upgrade brigade appears in a stock. There are simply no assurances that a stock has to keep rising. The analysts could also be caught up in too much euphoria. And hopefully you know the other risks about the potential losses.
WHAT ANALYSTS SEE NOW
Only one CrowdStrike analyst downgrade was seen after earnings. HSBC cut its rating down to Hold from Buy, but the $347 price target simply implies it had reached fair value according to HSBC’s own views. After the software outage, HSBC had quickly lowered its price target down to $302 from $388, and in late-August it had raised its target back up to $339 from $302. So this cut may just be yet another house-keeping view after earnings.
As noted above, and perpetually forward, investors need to do their own research and due diligence before relying on one analyst call (or many) before or after earnings. NASDAQ shows the current consensus analyst price target as $371.12, while Finviz shows the consensus analyst price target as $375.95. Many analysts have returned back to their pre-outage price targets. Oggonomics has tracked 7 analysts who raised price targets again after many analysts on Wall Street had just raised their targets ahead of earnings:
- Baird (Outperform) raised its target to $390 from $375 — after having raised the target to $375 from $315 less than a week before earnings. Its previous price target peak was at $350 before the outage.
- BofA Securities (Buy) raised its price objective to $400 from $365.
- BMO (Outperform) raised its target to $380 from $310. Its pre-outage price target peaked at $425 and had been trimmed down to $410 just a month before its outage.
- CFRA (Buy) raised its target to $404 from $393. Its price target had peaked at $406 pre-outage and it had a “Strong Buy” rating before the outage as well.
- Citigroup (Buy) raised its target to $400 from $300. Its price target had peaked at $425 in the summer before the outage.
- Oppenheimer (Outperform) raised its target to $410 from $365. Its pre-outage peak had been a $400 price target in June.
- Needham (Buy) raised its target to $420 from $360. Its pre-disaster peak target was $425.
- Susquehanna (Positive) raised its target to $to $400 from $310. Its pre-outage price target had peaked at $410.
LOOKING BACK TO PRE-EARNINGS TARGET HIKES
Also included here is a summary of the many price target hikes ahead of the report. These are listed below by date, and exclude the post-earnings hikes named above.
- Barclays (Overweight) to $372 from $295 (11/18)
- Cantor Fitzgerald (Overweight) to $370 from $350 (11/21)
- Jefferies (Buy) to $415 from $345 (11/22)
- JPMorgan (Overweight) to $369 from $330 (11/22)
- KeyBanc (Overweight) to $395 from $345 (11/22)
- Morgan Stanley (Overweight) to $355 from $325 (11/18)
- Stifel (Buy) to $375 from $300 (11/20)
- Truist (Buy) to $375 from $325 (11/18)
IN THE END…
If you add up the pre-earnings and post-earnings price target hikes, that is 15 different research reports calling for even higher prices in 2025. There are absolutely no assurances that come with those calls, and every one of those analyst reports have disclaimers that their information and forecasts could be flawed or may not come to fruition.
Oggonomics does not issue formal ratings or price targets on CrowdStrike. The figures and opinions covered in this report were issued by the firms named individually above. Any decision to buy or sell a stock (or hold, avoid, or even short sell) is solely up to each investor. Those decisions should also be made with a financial advisor.
