.August 14, 2024 12:50 PM

Scotiabank analysts have lowered their price target for CrowdStrike Holdings (NASDAQ:CRWD) to $265 from $300, while still maintaining a Sector Perform rating on the stock. This adjustment comes after extensive research, including discussions with customers, lawyers, and cybersecurity experts, regarding the recent CrowdStrike/Windows global outage. The findings suggest that most customers facing minimal impact are unlikely to seek concessions, while those with serious financial impacts may turn to cybersecurity insurance or negotiate with CrowdStrike directly. Legal action is seen as a last resort, with increased risk to CrowdStrike’s ARR estimates for 2025-26 but less concern about legal costs affecting FCF targets.

Despite being recognized as a leading software company, analysts anticipate challenges for CrowdStrike in 2024, leading to the decision to maintain a Sector Perform rating on the stock. The research conducted by Scotiabank analysts indicates that customers with minimal or moderate impact from the recent CrowdStrike/Windows global outage are unlikely to seek concessions from the company. However, those facing significant financial impacts may turn to cybersecurity insurance or negotiate directly with CrowdStrike for service credits or additional offerings. Legal action is considered a last resort, with the analysts expressing more concern about the impact on CrowdStrike’s ARR estimates for 2025-26 than on legal costs affecting FCF targets for the same period.