It almost seems like a bad dream.
CrowdStrike Holdings (CRWD) was blowing its own horn on Dec. 16, as the cybersecurity company let the world know that it had been named a leader and outperformer in the 2024 GigaOm Radar Report for Ransomware Prevention.
Related: Analysts adjust CrowdStrike price target ahead of earnings
Ransomware is malware designed to block access to a computer system until the victims fork over a sum of money.
The FBI said earlier this year that ransomware attacks increased 18% in 2023, and a U.S. Department of Justice report released in September said that ransomware “has become a lucrative crime and a costly and destructive threat to business and government.”
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“Due to the evolving techniques employed by ransomware actors, which has led to an increase in the scale, scope and frequency of attacks, combating the ransomware threat is a formidable task,” the DoJ report said.
The GigaOm Radar Report awarded CrowdStrike’s Falcon cybersecurity platform 10 perfect scores across critical categories, including predictive analytics, response automation and ease of management.
CrowdStrike CEO: Company tested by July outage
The Falcon platform was credited with leveraging AI-driven threat detection to streamline decision-making, simplify querying large datasets and enhance automated responses.
Meanwhile, CrowdStrike was announcing Fal.Con 2025, which it calls “the cybersecurity event of the year,” slated for Las Vegas on Sept. 15-18.
Related: Analysts update their CrowdStrike stock price after earnings
The most recent Fal.Con event brought in 6,000 from 60 countries and 100 exhibiting ecosystem partners, the company said.
With all this activity and goodwill, it’s almost hard to believe that this is the same company that was sent reeling back in July. That was when a faulty upgrade to its Falcon Sensor security software sparked what has been described as the largest IT outage in history.
Computers worldwide were knocked offline. Airlines and airports were hit especially hard by the outage, which saw travelers suffering through delays and flight cancellations.
The outage is estimated to have cost U.S. Fortune 500 companies $5.4 billion in damages, and CrowdStrike shares tumbled more than 35% in the two weeks that followed the July 19 incident.
The company’s stock is up 47.1% year to date.
On Dec. 16 the Austin company petitioned a Georgia court to dismiss nearly all claims in a lawsuit filed by Delta Air Lines (DAL) over the outage, calling the lawsuit “far-fetched” and ultimately not permissible under the state’s law, according to CRN.
Atlanta-based Delta’s lawsuit, filed in late October in Fulton County Superior Court, seeks damages from CrowdStrike in connection with the IT outage and resulting flight disruptions over five days.
Delta said in its lawsuit that it “suffered over $500 million in out-of-pocket losses” from the incident and signaled it would seek at least that amount from CrowdStrike.
“Following the summer’s incident, as a company, we were tested,” George Kurtz, CrowdStrike’s co-founder and CEO, said during the company’s Nov. 26 earnings call.
“We responded with speed, care and resolve, and we focused on becoming even better, continuing to deliver industry-leading cyberprotection on the Falcon platform’s proven, resilient and scaled AI native architecture,” he told analysts.
CrowdStrike beat Wall Street’s third-quarter earnings and revenue forecasts, but investors were disappointed with the fourth-quarter outlook.
Kurtz said the company closed a record 260 million-dollar-plus transactions in the quarter, an average of four more million-dollar-plus deals every business day.
“Results like these demonstrate the customer conviction, partner commitment and market sentiment for CrowdStrike as cybersecurity’s innovation leader and security platform of record,” he said.
Analyst calls CrowdStrike a tech leader
JP Morgan analyst Brian Essex sees good things in CrowdStrike’s future, and on Dec. 16 he raised the investment firm’s price target on the company to $418 from $372 while affirming an overweight rating on the shares.
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The analyst is updating security software price targets for 2025 to reflect the firm’s view of current and anticipated market conditions.
“CrowdStrike has established itself as a technology leader in the endpoint security market with a disruptive platform that has enabled it to penetrate core and adjacent markets with a high level of efficiency,” the analyst said in a research note.
Growth is still expected to be among the best within the firm’s coverage, said Essex, who says the company can deliver free cash flow margins of 30% or better in the years ahead.
CrowdStrike has consistently been able to deliver fundamental improvement better than analysts’ expectations as it continues to progress toward a goal of $5 billion of annual recurring revenue by fiscal 2026, he added.
ARR is a key performance indicator that’s especially important for businesses with subscription-based models, such as software-as-a-service companies..
“Considering valuation at compelling levels, strengthening secular demand trends, and an outlook that implies ongoing fundamental improvement, we believe now is the right opportunity to own CrowdStrike,” Essex said.
Argus: CrowdStrike handled IT outage
Earlier this month, Argus raised the firm’s price target on CrowdStrike to $388 from $325 and maintained a buy rating on the shares after the earnings beat.
The disruptions caused by CrowdStrike’s July 19 software update are a reputational black eye, the firm said, but the company has handled the remediation of the customer outage as well as could be expected.
CrowdStrike transparently accepted responsibility, quickly released a patch, and worked with customers to rapidly reboot and recover, Argus said.
The company developed new quality assurance systems to make another such event highly unlikely, and it provided a package of one-time customer discounts to make good with those affected by the outage, the firm said.
CrowdStrike’s new customer commitment program will undoubtedly slow revenue growth and provide a tighter profit margin, but it is the right thing to do, Argus said.
The program is a $60 million investment that CrowdStrike introduced to show goodwill to affected customers while potentially driving long-term growth.
Morgan Stanley raised the firm’s price target on CrowdStrike to $390 from $355 and maintained an overweight rating on the shares.
In the near-term, the firm said it saw less upside given platformization headwinds and valuations above historical average levels. But it still favors “premier consolidators” Palo Alto Networks (PANW) and CrowdStrike over the longer-term.
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