JMP Securities has maintained its Market Outperform rating and $400.00 price target for CrowdStrike Holdings (NASDAQ:CRWD). The firm's commentary addressed several topics, including CrowdStrike's recent global IT outage and its implications.
According to the firm, 99% of CrowdStrike's Windows sensors were back online as of July 29th, following a series of internal actions such as enhanced software testing, improved error handling, and new deployment procedures.
The median cybersecurity company in JMP Securities' coverage is trading at 12.1 times its calendar year 2024 estimated revenue, an increase from the 11.3 times revenue multiple noted in a previous earnings preview on May 14, 2024.
The firm pointed out that despite the IT outage, they do not foresee widespread account churn for CrowdStrike and expect the company's overall business trajectory to remain stable.
JMP Securities also commented on the broader cybersecurity sector, referencing Google (NASDAQ:GOOGL)'s unsuccessful attempt to acquire Wiz and mentioning Gartner (NYSE:IT)'s new Single-Vendor SASE Magic Quadrant.
The firm's report included a total of 40 data points specific to the CrowdStrike IT outage, suggesting that some of the blame could be attributed to the operating system itself and that customers with robust backup and recovery frameworks experienced minimal disruption.
The firm assumes CrowdStrike's legal team will proactively address any potential legal matters with customers to prevent public proceedings. Despite initial reputational damage, JMP Securities believes that CrowdStrike's stock pullback presents an attractive entry point for investors.
InvestingPro Insights
As the cybersecurity landscape evolves, with firms like CrowdStrike (NASDAQ:CRWD) at the forefront, it's crucial to consider the financial health and market positioning of major players in the industry. Google (NASDAQ:GOOG), with its extensive suite of services including cybersecurity solutions, offers an interesting comparison point.
An InvestingPro Tip highlights that Google holds more cash than debt on its balance sheet, which is a strong indicator of financial stability and may provide it with strategic advantages in pursuing acquisitions or investments in the cybersecurity space. Additionally, the fact that 18 analysts have revised their earnings upwards for the upcoming period suggests an optimistic outlook for Google's performance, potentially impacting the broader sector.
Looking at the InvestingPro Data, Google's market capitalization stands at an impressive $2.12 trillion. Its P/E ratio is currently 24.43, and this valuation metric adjusts to 23.13 when looking at the last twelve months as of Q2 2024, indicating a favorable comparison to near-term earnings growth. Moreover, the company's revenue growth over the last twelve months as of Q2 2024 is a solid 13.38%, reflecting its strong market position.
Investors interested in the Interactive Media & Services industry, which includes cybersecurity, can find additional insights on Google by visiting InvestingPro. There are 12 more InvestingPro Tips available, offering a deeper dive into Google's financial metrics and market performance that could be pertinent when considering investments in related sectors like cybersecurity.
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