CrowdStrike Analyst Initiates Coverage, Says Company Has 'Best-In-Class Endpoint Security Capabilities'

Analysts at BMO Capital Markets initiated coverage on Crowdstrike Holdings Inc CRWD Wednesday, saying the company offers best-in-class endpoint security capabilities.

Analyst's Bullish Take: Keith Bachman at BMO Capital initiated coverage on Crowdstrike with an Outperform rating, and a $120 price target.

“We believe that CrowdStrike offers best-in-class endpoint security capabilities and an expanding platform that will help CrowdStrike compete against Microsoft and other vendors,” Bachman said in a note to investors Wednesday. “Further, we think CrowdStrike will benefit from consolidation, particularly as organizations adopt XDR.”

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The investment firm notes that CrowdStrike's cloud-native platform, scalable architecture, single unified agent, and broadening set of integrated solutions are difficult to replicate and will enable the company to successfully compete against Microsoft and other legacy players.

Additionally, BMO sees consolidation as a trend that will drive new and existing customers to standardize on CrowdStrike's platform and adopt more of the company's modules.

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Bachman said that CrowdStrike's current free cash flow (FCF) valuation trades well below its growth rate, which represents an attractive entry point for the shares, even as the analyst expects a more modest upside to the company's consensus expectations compared to previous quarters.

The firm estimates that CrowdStrike can achieve $5 billion in annual recurring revenue (ARR) by FY26, driven by strong growth in the coming years.

Last Word: BMO is bullish on CrowdStrike's future, citing the company's competitive advantages, expanding platform, and attractive valuation.

With the cybersecurity market expected to continue growing, and CrowdStrike's expanding capabilities and platform positioning it to effectively compete in the evolving market, the firm believes that CrowdStrike offers a compelling investment opportunity.

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