Why CrowdStrike Holdings Stock Crushed it on Friday
Key Points
He maintained his buy recommendation on the shares.
This followed discussions with company officials about the Falcon Flex service.
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A substantial price target raise gave plenty of lift to CrowdStrike Holdings (NASDAQ:CRWD) on Friday. Encouraged by that move, investors piled into the cybersecurity stock, sending it to a nearly 5% gain on a day when the S&P 500 index bumped 0.6% higher.
Secure in his recommendation
The pundit behind the hike was Needham's Mike Cikos, who lifted his CrowdStrike fair value assessment to $310 per share from $250. He maintained his buy recommendation on the mainstay of the cybersecurity sector.
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According to reports, Cikos' new take centered on the company's Falcon Flex. This is a subscription service that gives users access to a "pool" of the company's products, allowing them to switch in and out of CrowdStrike models as needed.
Citing a conversation his team had with company officials, Cikos concluded that Flex is enabling customers and adding to the value of its foundational platform. Another factor affecting his change was a set of minor adjustments he made to his free cash flow (FCF) estimates for the company's fiscal years 2027 and 2028.
Playing defense
Falcon Flex is appropriately named, in my opinion, given the high degree of flexibility it gives CrowdStrike clients. The inexhaustible rise of artificial intelligence (AI) could create bad actors with powerful hacking tools, so the more nimble any cyber defense system, the better. I'd agree with Cikos' very bullish outlook on this stock's future.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends CrowdStrike. The Motley Fool has a disclosure policy.
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