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CrowdStrike Lifts Off on Analyst Upgrade to Buy

Hacker prevention software provider CrowdStrike jumps after receiving an upgrade and price-target lift from an analyst at D.A. Davidson.

Shares of hacker prevention software provider CrowdStrike Holdings  (CRWD) - Get Free Report jumped on Tuesday after receiving an upgrade from D.A. Davidson analyst Andrew Nowinski, who boosted his rating on the stock and raised his one-year price target on what he sees as solid improvement in the company’s growth rate.

In a research note to clients, Nowinski lifted his rating on the stock to buy from neutral and raised his one-year price target to $75 from $58 on expectations that the company is “significantly” benefiting from Broadcom's  (AVGO) - Get Free Report acquisition of Symantec “… as many resellers have noted an improvement in growth rates.”

That and “little to no impact” from VMware's  (VMW) - Get Free Report acquisition of Carbon Black, which has created a larger competitor for CrowdStrike, combined with increasing traction among CrowdStrike's other products including their vulnerability management module all points to better-than-expected results in the coming quarters, Nowinski said.

The potential for more market share gains coming from Symantec "is the single largest revenue growth driver for CrowdStrike in 2020," the analyst said in his note. 

The Sunnyvale, Calif.-based company, whose claim to fame is that the FBI used it to assess the Russian hacking of the DNC, joined the unicorn IPO parade last year, going public in June at $34 a share, netting it more than $600 million.

However, like other unicorns, the company's stock has suffered since on investors' concerns about long-term competition and profitability. 

Shares of CrowdStrike were up 4.71% to $66.28 in trading on Tuesday. CrowdStrike shares have added 37% over the past three months.