CrowdStrike Holdings slips even as Wedbush starts coverage with outperform rating
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CrowdStrike Holdings (NASDAQ:CRWD) fell more than 1% in premarket trading on Thursday even as investment firm Wedbush Securities started coverage on the cybersecurity firm with an outperform rating, citing its leading status in the industry.
Analyst Taz Koujalgi noted that CrowdStrike (CRWD) not only has a "broad portfolio" of products and services for its clients, but it has evolved from a endpoint security vendor into a full-fledged cybersecurity platform.
"Its current installed base of ~20K customers gives it significant runway to add new customers as other larger security vendors have much higher customer counts," Koujalgi wrote in a note to clients, adding that CrowdStrike (CRWD) also has a "significant runway" to upsell to its installed base.
Koujalgi added that the recent slowdown in momentum and guidance that CrowdStrike (CRWD) has seen is due to the macroeconomic outlook and is a concern, but it's likely that the company is giving conservative guidance. 
Koujalgi also noted that the company is targeting free cash flow margins of 28% to 30%, "which limits the downside for the stock." 
Last month, CrowdStrike (CRWD) said it expects its fourth-quarter revenue to be in a range of $619.1M to $628.2M, compared to the $634.2M analysts had forecast. It also expects earnings, excluding one-time items, of 42 to 45 cents a share, which surpassed estimates of 34 cents a share.
Earlier this month, investment firm William Blair listed CrowdStrike (CRWD) among its top tech stock picks for 2023.