Crowdstrike (CRWD) has delivered strong gains for investors over the past year and has continued to do so in 2021, shaking off a decline in Q1 and picking up steam throughout the second quarter.
While CRWD stock has been noted as an expensive growth name, the cybersecurity specialist’s success has been built on a solid foundation of real-world accomplishments and Canaccord’s Michael Walkley expects the company to keep on outperforming.
“We view CrowdStrike as a long-term secular winner in security due to its native cloud platform advantage versus closely held peers, and its expansion into tangential segments to capture a greater share of security budgets,” the 5-star analyst said. “We believe CrowdStrike’s first-mover cloud advantage, with a focus on EDR and AI/ML detection approaches in a competitive endpoint security market with an expanding toolkit, makes it an important component of a robust cybersecurity framework.”
Walkley has the data to back up his confident take. According to recently published security software market analysis by Gartner, the company continues to take share in the endpoint protection platform (EPP) segment and has climbed two spots to leapfrog Symantec and McAfee and break into the top three for the first time.
Walkley notes that despite the company targeting growth in “adjacent security areas,” it is easy to underestimate the “abounding displacement opportunities” in its core market.
EPP claims a big chunk of the security market, amounting to 17.9% and exhibiting faster growth than the security software market as a whole. Gartner data shows that the EPP segment grew by 20% YoY in 2020 to reach $8.9 billion, while the whole security software market grew by 10% to generate $49.7 billion in annual revenue.
What’s more, as legacy players still dominate the field – the top 5 players account for ~60% of the market – Walkley believes there is a “ripe opportunity” for CRWD to take share.
The analyst also expects the company’s pivot toward “adjacent” cybersecurity fields will see it make further inroads into an estimated $106 billion TAM (total addressable market) by F2025.
“We have strong conviction in the numerous tailwinds forging a path toward management’s goal of $3B in ARR by F2025,” Walkley summed up.
All in all, Walkley reiterated a Buy on CRWD shares backed by a $280 price target, implying room for an additional 10% uptick from current levels. (To watch Walkley’s track record, click here)
Some stocks draw a diverse set of opinions on Wall Street, but CRWD is not one of them. Of the 18 recent reviews, 17 are to Buy and only 1 recommends to Hold, all coalescing to a Strong Buy consensus rating. However, the shares gains have taken the share price close to the $261.78 average price target, which now indicates modest upside of 4% in the year ahead. (See Crowdstrike stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.