Analyst Note| Mark Cash |
We are raising our fair value estimate for narrow-moat CrowdStrike Holdings to $200 per share from $175 after second-quarter results topped our lofty expectations that exceeded previous guidance. CrowdStrike breezing by high expectations is the norm, and our increase comes from anticipating a longer period of rapid growth even while amassing scale and expanding its margins. We believe CrowdStrike is an outsize beneficiary of a heightened threat environment driving organizations to update their endpoint and workload protection capabilities, as well as breach victims requiring professional assistance from its renowned services division. While we remain excited about CrowdStrike being in the early stages of disrupting the endpoint security and adjacent markets, its world-class retention metrics, and ability to lock customers into its ecosystem for the long-run, we still view shares overvalued.