CrowdStrike Hits a Bump as Customers Push Off Purchasing Decisions; Lowering FVE to $156

We are lowering our fair value estimate for narrow-moat CrowdStrike to $156 from $196 after the company reported third-quarter financial results below our estimates coupled with weak guidance for the upcoming quarter. While last quarter remained strong despite the macroeconomic headwinds, this quarter painted a different picture for CrowdStrike, with longer sales cycles and the firm's net new annual recurring revenue, or ARR, coming in lighter than expected. While we continue to view CrowdStrike as a leader in endpoint security we expect elevated macroeconomic uncertainty to weigh down on the company's results for the next few quarters. Despite our fair value revision, we think CrowdStrike is trading at a discount with overly punitive damage inflicted on the firm's share price as investors have fled technology companies.