On Tuesday, news broke that CrowdStrike Holdings Inc. (NASDAQ:CRWD) will be joining the Nasdaq-100 equal-weighted index and the Nasdaq-100 tech index. As a result, the CRWD shares spiked more than 9% with Ritholtz Wealth Management Founding Partner Josh Brown saying the company will only become stronger in the coming years.
Brown, who bought the CRWD stock last September believes CrowdStrike’s Falcon X platform will play a crucial part in its growth with more companies joining the network.
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The CrowdStrike stock is up nearly 34% this year and 141% over the last 12 months, but Brown, acknowledging its volatility and expensive pricing compares its business moat to Facebook Inc.’s (NASDAQ:FB) and Alphabet Inc.’s (NASDAQ:GOOG).
He said that its cybersecurity network platform could benefit the way Facebook and Google benefitted as more companies embraced social media and search engine marketing.
Should you buy CrowdStrike shares now?
From a valuation perspective, CrowdStrike shares trade at a steep forward P/E ratio of 346.49, making the stock attractive to value investors. However, analysts expect its earnings per share to grow by 55.60% this year at an average annual rate of 66.90% over the next five years.
Therefore, although value investors may find the CRWD stock significantly overvalued, it could be a compelling cybersecurity option for growth investors. As a result, it may not be too late to buy CrowdStrike shares for investors willing to overlook the high valuation.
Technical overview: CrowdStrike stock price forecast for Q3 2021
Technically, CrowdStrike shares seem to have recently bounced off the 100-day moving average in the intraday chart. However, the stock is yet to hit overbought conditions in the 14-day RSI, leaving room for more upward movement. In addition, the CRWD stock price has space to cover before hitting the trendline resistance in the ascending channel formation.
Therefore, investors can target extended short-term gains at approximately $283.97 or higher at $300.34. The key support levels are $253.84 and $236.81.
Bottom line: the case for buying the CRWD rebound
In summary, although CrowdStrike shares spiked more than 9% on Tuesday, the stock is yet to hit overbought conditions in the strength index indicator.
Furthermore, CRWD earnings per share promise solid growth this year, and over the next five years, making the stock attractive to growth investors. Therefore, now could be the time to invest in CRWD ahead of its exciting growth prospects.
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