'Removing from Top Picks' - Oppenheimer

While we remain positive on the long-term opportunity, we expect shares to face continued pressure near-term as the company deals with the fallout of its defective software update and related global Windows outage (which has yet to be completely resolved). While still too early to tell the impact of the failure on CrowdStrike's business and financial results, we believe it opens the door for sizable fines, lengthy litigation, and pressure on business activity. Specifically, we expect closing rates to decline, discounting & churn to rise, purchasing decisions to be delayed, and for upsell activity to slow as customers evaluate CrowdStrike's behavior and internal practices and the extent to which they want to rely on its technology. Already on Friday, The Information reported that several Fortune 100 companies are thinking about moving to different vendors. Lastly, given this is a non-breach issue, the question around liability and damages will serve as an overhang with class-action lawsuits likely to follow. Coupled with a premium valuation, we see a negative near-term setup for the stock. No change to estimates or PT at this time. We maintain our Outperform rating taking a long-term view in mind, and look for additional color on CrowdStrike's 2QFY24 earnings call.