Goldman Sachs Analyst Stays Course On CrowdStrike Despite Outage, Expects Strong Company Reputation To Aid Recovery

CrowdStrike Holdings, Inc CRWD shares are trading lower Friday after a significant outage that affected businesses worldwide following an update on its cloud software.

On Thursday night, a failed update of CrowdStrike’s Falcon platform caused widespread disruptions in Microsoft Corp MSFT systems, halting critical global services such as airports, ports, financial institutions, and hospitals.

Goldman Sachs analyst Gabriela Borges maintained a Buy rating on CrowdStrike with a price target of $400.

George Kurtz, CEO of CrowdStrike, informed via X that the outage had been resolved. CrowdStrike clarified that the disruption was not a security incident or a cyberattack.  

Based on Borges’ estimates, CrowdStrike has a 15%—20% share of the endpoint market and is deployed across over 250 million endpoints globally. He expects some of these endpoints to be running the Microsoft operating system.  

Based on Borges’ industry conversations after outages tied to security incidents, vulnerabilities, and hacks, he noted that customers generally care more about what happens post-issue, including the timing and ease of a fix and clear and transparent customer communication.

Given CrowdStrike’s strong reputation, Borges expects ongoing updates from the company. The analyst expects to see ongoing newsflow about the impact of the outage over the next several days as customers work through the CrowdStrike fix.

Cybersecurity products have to meet a higher reliability and security bar in customer deployments than other technology products because they are mission-critical and actively attacked by adversaries, as per Borges.

He noted that this would reinforce the industry entry barrier and the need for best-in-class updates, outages, and customer service protocols, ultimately favoring companies with scale.

Borges projected GrowdStrike’s fiscal 2025 revenue and EPS of $4 billion and $4.02.

Price Action: CRWD shares traded lower by 10.30% at $307.21 at the last check on Friday.

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