CrowdStrike Stock Has Roared Back. Why This Trader Is 'Suspicious.'

CrowdStrike (CRWD) stock has been on a rollercoaster ride this year, with a significant rebound in recent weeks. The cybersecurity giant's shares jumped 5.1% on Thursday, January 15, 2025, reaching $314.92 per share. This surge in stock price comes after a tumultuous period for the company, which faced a major service outage in July 2024 that impacted many of its customers, including Delta Air Lines. The outage resulted in an estimated $380 million hit to revenue for Delta in the third quarter, and the airline is considering pursuing damages from CrowdStrike.

Despite the challenges, CrowdStrike's stock has shown resilience, climbing 18.27% over the past month. This outperformance compared to both the broader tech sector and S&P 500 index suggests that investors remain confident in the company's long-term prospects. However, one trader remains 'uspicious' about the recent rally in CrowdStrike's stock price.



The trader, who wished to remain anonymous, expressed concerns about the sustainability of CrowdStrike's recent stock price recovery. "While it's great to see the stock bouncing back, I can't help but feel that there's something fishy going on," the trader said. "The company is still dealing with the fallout from the July outage, and I'm not convinced that the market has fully priced in the potential long-term impact on the business."

The trader pointed to several factors that could be contributing to the stock's recent rally, including positive analyst coverage and Delta's Q3 results, which showed less impact from the CrowdStrike outage than feared. However, the trader remained skeptical about the long-term prospects for the company, given the potential reputational damage and loss of customer trust resulting from the incident.



The trader also raised concerns about CrowdStrike's valuation, which remains elevated despite the recent challenges. The company trades at a forward P/E ratio of 79.89, well above the industry average of 31.5. This premium valuation suggests that investors are pricing in expectations for strong future growth, but the trader questioned whether the company's current growth trajectory justifies such a high valuation.

In conclusion, while CrowdStrike's stock has rebounded in recent weeks, one trader remains 'uspicious' about the sustainability of the rally. The trader cited concerns about the company's long-term prospects, valuation, and the potential impact of the July outage on customer trust and reputation. As investors consider CrowdStrike's stock, it is essential to weigh the potential risks and rewards, and remain vigilant about the company's ongoing challenges and the broader market dynamics.