Analysts rush to re-price CrowdStrike after earnings surprise.

CrowdStrike (CRWD) shares rose early Wednesday as analysts tweaked their recommendations and price targets after the cybersecurity company posted stronger-than-expected fourth quarter earnings.

After disappointing updates from Palo Alto Networks (PANW) and Zscaler (ZS) over the previous two weeks, CrowdStrike's earnings, reported late Tuesday, were expected to provide light on cybersecurity. Palo Alto Networks said that firms were showing "fatigue" about cybersecurity investment as the potential of attack, fueled in part by AI, increased.

Last month, FBI Director Chris Wray told Congress that Beijing-connected hackers have been targeting critical infrastructure in the U.S. to "wreak havoc and cause real-world harm to American citizens and communities." Cybersecurity Ventures, a research organization, estimates cyberattacks cost the world economy $8 trillion last year and $10.5 billion by 2025.

The CrowdStrike: AI increases cybersecurity risk "The state of the threat landscape has never been more elevated," CrowdStrike CEO George Kurtz told investors late Tuesday. What took enemies hours is now minutes and seconds. Attack speeds will rise."

The cloud is today's battleground for cyberattacks," said. "[Generative] AI puts advanced cybercrime tradecraft in the hands of attackers of all skill levels (and) will dramatically grow the adversary population." CrowdStrike expects 2024 revenue to rise 78.5% to $3.92 billion to $3.97 billion.

CrowdStrike also predicted adjusted earnings of $3.77 to $3.97 a share, ahead of the LSEG prediction of $3.80, as gross margins remain around 78%. Analysts rush to set new Palo Alto Networks price targets as shares fall

CrowdStrike also announced the acquisition of Israeli cloud-data security startup Flow Security, which will expand its product line. However, its strong prediction, especially compared to Palo Alto Networks and Zscaler's dampened outlooks, has prompted Wall Street to recalibrate price targets as analysts respond to the stock's early Wednesday spike.

"CrowdStrike has clear momentum heading into FY25, benefiting from platform trends, larger multiproduct enterprise deals, and brand recognition/dominance in a number of essential security categories," said Trevor Walsh of JMP Securities. After yesterday night's earnings announcement, Walsh raised his CrowdStrike price target by $70 to $400. He rates the stock outperform.

CrowdStrike leads market After adding $55, KeyBanc Capital Markets analyst Eric Heath raised his CrowdStrike price target to $430. He noted the group's "leading platform vendor" reputation in cybersecurity and "our view of a steady-to-improving security demand environment this year."

Third Bridge analyst Jordan Berger calls CrowdStrike a "leader in the market" for premium cybersecurity. "Despite Palo Alto Networks' guidance reduction raising concerns about cybersecurity market spending fatigue, CrowdStrike's performance does not demonstrate a broader impact to the cybersecurity market," Berger stated.

Well Fargo raised its CrowdStrike price objective by $55 to $435, BMO Capital Markets by $103 to $425, and Rosenblatt Securities by $25 to $400. Tal Liani of Bank of America raised his CrowdStrike price target to $400 and reaffirmed his buy rating after "another solid quarter of outperformance.