CrowdStrike Is Laying Off 5% of Its Staff. How Should You Play ‘Strong Buy’ CRWD Stock Here?
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CrowdStrike (CRWD) stock is down more than 5% on Wednesday, May 7 after the cybersecurity giant announced plans of reducing its workforce by about 5%.
CrowdStrike expects these mass layoffs tied to artificial intelligence to incur charges worth up to $53 million. Still, the Austin-headquartered firm reiterated its guidance for its full-year fiscal 2026 on Wednesday.
Despite today’s decline, CRWD stock is up more than 40% versus its low in early April.
Is the Layoffs Announcement Positive for CRWD Shares?
While the cybersecurity firm is laying off employees in some areas of the business, its note to staff this morning confirmed plans of continuing to “prudently hire in customer-facing and product engineering roles.”
This indicates the management’s focus on operational efficiency and targeted growth, as per Gregg Moskowitz, a Mizuho analyst.
“This is a very thoughtful and pragmatic management team, and it’s highly focused on profitably scaling the business,” he told clients in a research note on Wednesday.
Moskowitz reiterated his “Outperform” rating on CrowdStrike stock today, citing the strength of its financials and an impressive gross profit margin of nearly 75%.
Cramer Says CrowdStrike Stock Is Terrific for the Long Term
Piper Sandler analysts are also convinced that CrowdStrike’s layoffs announcement this morning came from a place of strength.
CRWD shares may be worth owning also because the Nasdaq-listed firm continues to grow at a fast clip. Its management currently expects a 20% year-over-year increase in revenue to about $1.10 billion in Q1.
Other notable names that are bullish on the cybersecurity stock for 2025 include famed investor and former hedge fund manager, Jim Cramer.
Cramer recently dubbed CRWD shares a “terrific” investment for the long term.
Is Now the Right Time to Invest in CrowdStrike?
According to Barchart, the consensus rating on CrowdStrike stock currently sits at “Strong Buy.”
However, the mean target of about $411 signals potential downside of another 3% from current levels, indicating CRWD may have gotten ahead of itself in recent weeks.
Investors are, therefore, recommended to wait for a pullback before loading up on this cybersecurity stock in 2025.
On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.