CrowdStrike downgraded at Stifel on 'messy' results, firm says it may take a bit to reset
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CrowdStrike Holdings (NASDAQ:CRWD) was downgraded by investment firm Stifel on Wednesday after the company reported third-quarter results and issued fourth-quarter guidance that missed expectations.
Analyst Brad Reback lowered his rating on CrowdStrike Holdings (CRWD) to hold from buy, while slashing the price target to $120 from $225, noting that the results were "disappointing" and the revenue beat in the third-quarter was "well below historical trends" at 1%, compared to 4.5% on average, as well as the company's first annual recurring revenue miss.
"The poor performance was driven by macro headwinds that contributed to elongated smaller customer sales cycles (worst new customer acquisition quarter since F3Q21), as well as a greater portion of enterprise clients moving to multi-phase subscription start dates," Reback wrote in a note to clients.
"Although management's preliminary [calendar year 2024] outlook was below consensus, we believe it could take a few quarters until expectations are fully de-risked," the analyst added.
CrowdStrike (CRWD) shares plunged nearly 18% in premarket trading to $113.21 following the results.
Earlier this month, hedge fund Tiger Global disclosed that it had reduced its stake in CrowdStrike Holdings (CRWD) during the third-quarter, while also making several other changes to its portfolio.
Analysts are mostly positive on CrowdStrike Holdings (CRWD). It has a BUY rating from Seeking Alpha authors, while Wall Street analysts also rate it a STRONG BUY. On the other hand, Seeking Alpha's quant system, which consistently beats the market, rates CRWD a HOLD.