CrowdStrike rises as Morgan Stanley upgrades, citing continued momentum
CrowdStrike (NASDAQ:CRWD) shares rose on Monday after investment firm Morgan Stanley upgraded the cyber security firm, noting continued momentum in the sector and the company's strong performance.
Analyst Hamza Fodderwala moved CrowdStrike (CRWD) shares to overweight from equal weight and kept the firm's per-share price target of $215, noting CrowdStrike is "the leading beneficiary of growing secular trends within security." 
Doing some analysis, Fodderwala has found "limited signs" of a slowdown in growth for CrowdStrike (CRWD) and continued evidence that the total addressable market is larger than just the firm's core endpoint security market.
"Looking ahead, several positive catalysts such as a growing Federal pipeline, new module uptake and international expansion should drive further estimates upside," Fodderwala wrote in a note to clients.
CrowdStrike (CRWD) shares rose more than 3% to $167.02 in premarket trading on Monday.
Going further, Fodderwala noted that security is still a "top priority" as rising cyber threats continue across the globe and CrowdStrike's (CRWD) core Endpoint Detection & Response platform is considered "mission critical."
The analyst also noted that CrowdStrike (CRWD) is seeing further adoption based on conversations with Chief Information Officers and is seeing 100% growth from its non-endpoint offerings, which now account for 15% of its annual recurring revenue, showing that its total addressable market could be $30B bigger than first thought.
Fodderwala also pointed out that CrowdStrike (CRWD) has an "attractive" free cash flow valuation, gives it a "favorable" risk-reward profile in this market and allows it to compete for employees in a hot labor market.
In April, investment bank Goldman Sachs upgraded CrowdStrike (CRWD) and raised the price target on the stock, noting its fundamentals have continued to improve.
Analysts have been overly bullish on CrowdStrike's stock (CRWD). It had an average rating of Strong Buy from Wall Street analysts, while Seeking Alpha authors rate it a HOLD. Conversely, Seeking Alpha's quant system, which consistently beats the market, rated CrowdStrike a HOLD.




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