DA Davidson just lowered its price target on CrowdStrike (CRWD) stock.

After rising nearly 10% over the past week, shares of CrowdStrike (NASDAQ:CRWD) continued their ascent higher today. The 3% rise investors are seeing in CRWD shares this afternoon is notable because it comes on the heels of a major price target cut by analysts at DA Davidson.

In fact, these analysts cut their price target for CrowdStrike by 23%, suggesting that CrowdStrike’s recent disruption represents a more sizable headwind than the market might be considering. customers,” which DA Davidson believes could lead many of the company’s customers to look for alternative cyber security providers.

This is a thesis that certainly makes sense. But today’s price action suggests many in the market may feel those concerns are already priced into the company’s stock price, with CRWD stock down about 35% from pre-outage levels.

Let’s take a look at what to make of this recent downgrade and what it could mean for investors going forward.

CRWD stock is higher despite today’s analyst downgrade

The stock market can be such an efficient pricing mechanism that analysts can often find themselves behind the curve. Today’s downgrade from analysts at DA Davidson appears to reflect a reactive downgrade, with analysts still maintaining a $290 price target for the company (down from $380 previously). If CrowdStrike hits that target over the next year, that could mean an upside of around 14% from current levels. So it’s not all bad.

Of course, the rather scathing note reflects the sentiment that many other analysts have taken in recent weeks. The kind of disruption that CrowdStrike was responsible for is not acceptable, and its recent share price decline also reflects the markets’ sentiments on the matter.

I’m not sure exactly what the ultimate impact of this disruption will be on customers’ willingness to switch to other providers. I’ve heard rumblings among some companies that they may be looking to explore their options. But if CrowdStrike can lock things down and sort out their upgrade processes, this stock may look like a steal in hindsight at current levels. We’ll just have to see.

At the time of publication, Chris MacDonald did not hold (either directly or indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

At the time of publication, the responsible editor had (either directly or indirectly) no position in the securities mentioned in this article.