Why CrowdStrike Holdings Stock Sank on a Positive Thursday for the Market

Investors weren't feeling entirely secure about cybersecurity stock CrowdStrike Holdings (NASDAQ: CRWD) on Thursday. Largely on the back of an analyst's recommendation downgrade, they traded out of the company, leaving it with a nearly 1% decline in price that day. That didn't look great when contrasted with the S&P 500's (SNPINDEX: ^GSPC) 0.4% gain.

Downgraded to neutral

The person responsible for the downgrade was Gregg Moskowitz of Mizuho, who changed his view on CrowdStrike stock to neutral from his previous outperform (buy, in other words). His price target on the cybersecurity company is $425 per share.

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According to reports, Moskowitz once flagged CrowdStrike as being one of his firm's favorite stocks. He still feels it might have a good future, as in his position it remains well situated for future growth. However, he feels that the company is now operating in a more risky environment, among other negative factors, and the stock's current popularity does not reflect this.

Moskowitz's move came days after the stock's most recent catalyst: a large transaction in company shares by CrowdStrike founder and CEO George Kurtz. The executive disclosed that he had gifted more than $1 billion in company stock to undisclosed recipients, shrinking his voting power to 2.5% -- as recently as 2022, he held 31%.

Thursday afternoon, in a brief post on LinkedIn, Kurtz addressed this, saying that he "moved some stock into trusts for my family, as well as to support causes we care about, like teenage mental health." Kurtz also quashed rumors about his impending departure from CrowdStrike, writing that "for those suggesting I'm riding off into the sunset... not a chance."

A good price, for some

CrowdStrike certainly is expensive, both in terms of its price and its valuations. Yet it's a much-admired company whose technology gets consistently high marks by users and cybersecurity experts. To me, this is a case of paying a premium for quality, and I'd be more bullish than Moskovitz on the stock.

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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.