CrowdStrike's misstep: SentinelOne and Palo Alto Networks gain ground

Investing.com - Cybersecurity firm CrowdStrike Holdings Inc (NASDAQ: CRWD) plummeted by more than 13% on Monday, extending Friday's 11% decline after update to the company's software led to a global disruption of Microsoft's (NASDAQ: MSFT) cloud services, affecting businesses worldwide.

Deutsche Bank analysts noted that “For a premium company and stock that trades at 15x CY25 revenue, we believe there is non-trivial downside risk that must be considered. No doubt competitors like SentinelOne Inc (NYSE: S), Microsoft, and even Palo Alto Networks Inc (NASDAQ: PANW) will look to seize on CrowdStrike's misfortune.”

On Monday, CrowdStrike's competitors, Palo Alto Networks and SentinelOne, experienced gains of 0.9% and 6.7%, respectively.

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Analysts noted that CrowdStrike is a leader in the cybersecurity industry, has a history of success spanning over 12 years. Despite instances of outages and cyber breaches disrupting and even compromising customer operations and data, providers and their stocks have typically shown resilience and quick recovery.

However, the outage has sparked significant frustration among customers, with many cases of severe business impact. IT professionals have had to work overtime, and even through the weekend, to fully recover from the event.

In the wake of this event, Deutsche Bank analysts maintained their hold rating for CrowdStrike, setting a price target of $350.

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