Goldman Downgrades Crowdstrike (CRWD) to Neutral on Valuation But May Turn More Positive on Pullback

September 13, 2021 7:28 AM EDT
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Price: $124.00 -0.06%

Rating Summary:
    36 Buy, 4 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 2 | Down: 23 | New: 24
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Goldman Sachs analyst Brian Essex downgraded shares of Crowdstrike (NASDAQ: CRWD) to Neutral from Buy.

Although Essex still sees CRWD as a member of the “best of breed vendors” group in the bank’s coverage, he took note of the y/y growth deceleration (comparing y/y growth in C2Q21 to C1Q21).

“Revenue growth of 69.7% y/y this quarter was very impressive in our view, but net new ARR only hit $151mm in C2Q21. While we expect strong performance ahead and see a meaningful opportunity for the company to take share in its markets, we are moving to Neutral from Buy as better performance appears to be more fairly reflected in the stock price at current levels. We are downgrading to Neutral on valuation but could become more positive on a pull back,” Essex argues in a note sent to clients.

The $305.00 per share price target is left unchanged. The analyst adds that CRWD is up over 80% since being added to the bank’s Buy list nearly a year ago.

The analyst also downgraded Check Point Software Technologies (NASDAQ: CHPK) to Sell from Neutral and slashed the price target to $121.00 per share from $133.00.

“While firewall demand remains robust as seen by Check Point’s peers ability to accelerate into the high twenty percent to low thirty percent range, on the contrary we are seeing CHKP growth remain in low single digit territory,” Essex added.

On a more positive note, Goldman highlights SentinelOne (NYSE: S), Palo Alto Networks (NYSE: PANW), Ping Identify (NYSE: PING), AvePoint (NASDAQ: AVPT) and Tenable (NASDAQ: TENB) as top picks in the security and analytics research coverage.

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