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CrowdStrike Falls as Pricing Stress Makes Morgan Stanley Go Underweight

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By Dhirendra Tripathi

Investing.com – Crowdstrike stock (NASDAQ:CRWD) fell 3.3% in Monday’s premarket trading as Morgan Stanley initiated coverage on the stock at 'underweight' on valuation grounds.

The bank cited competitive pressure and pricing challenges.

Analyst Hamza Fodderwala has put a target of $247 on the stock, around 13% below its Friday close of $284.30.

The Cloud-based AI-driven company rode the pandemic-fueled demand for cybersecurity solutions to rise to a leadership position. According to checks by the analyst, CrowdStrike is now increasingly challenged by more competitive next-gen alternatives that are narrowing the functionality gap and offering price points generally 15%-20%+ cheaper.

Fodderwala believes the competitive dynamic makes sustaining the pace of share gains notched up by the company more difficult and drive uncertainty on the pace of topline deceleration through 2022. The stock has more than doubled in the last year and now trades at over 50 times what it has generated in revenue in the last four quarters.

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