Citi maintains CrowdStrike stock Buy rating and $420 price target

On Wednesday, Citi analysts upheld their Buy rating on CrowdStrike Holdings (NASDAQ:CRWD) with a steady price target of $420.00. According to InvestingPro data, the stock currently trades at notably high multiples across key metrics, with a P/E ratio of 757 and significant premiums on both EBITDA and revenue valuations. The company’s stock has shown remarkable momentum, gaining over 52% in the past six months. The cybersecurity firm concluded its fiscal year 2025 with annual recurring revenue (ARR) figures generally in line with expectations, despite facing challenges from service outages. CrowdStrike’s ARR was bolstered by a slightly stronger uptake of its Cloud Module while its net retention rate (NRR) compressed more than anticipated, dropping approximately 1 percentage point below Citi’s projection of 113%.

The company’s remaining performance obligations (RPO) demonstrated a year-over-year acceleration, maintaining growth above 40% due to the maturation and assertiveness of its FalconFlex go-to-market strategy. Looking ahead to fiscal year 2026, Citi acknowledges that CrowdStrike is experiencing a more prolonged and challenging period than initially expected. This is attributed to the recent incident, increased investments, and complications arising from new accounting and tax-rate changes, which have impacted free cash flow (FCF) projections, falling below Citi’s and the Street’s expectations. Despite these challenges, InvestingPro analysis shows the company maintains strong financial health with a current ratio of 1.86 and operates with moderate debt levels. The company’s gross profit margin stands at an impressive 75.24%, reflecting operational efficiency.

Despite these near-term headwinds, CrowdStrike has expressed a strong conviction in its ability to significantly recover in the second half of the year. This confidence is based on the diminishing impact of the Cloud Module incident, the realization of revenue from free trials, and momentum in FalconFlex renewals and upsells. However, the anticipated sharp recovery towards normalcy and the uncertain near-term trajectory for new net ARR, ARR, and FCF, coupled with decelerating growth in emerging product ARR, may continue to be points of contention for investors, especially given the stock’s high valuation multiple.

Citi analysts conclude that despite the stock likely remaining range-bound in the short term, there are positive forward-looking indicators. These include unchanged or potentially stronger budgetary and technological consolidation opportunities, as well as sustained or improved go-to-market and sales efficiency, which support the medium-term estimates and justify maintaining the Buy rating and $420 price target for CrowdStrike stock. InvestingPro data reveals strong analyst consensus supporting this outlook, with price targets ranging from $301 to $475. Subscribers can access 12 additional ProTips and comprehensive financial metrics in the detailed Pro Research Report, offering deeper insights into CrowdStrike’s valuation and growth prospects.

In other recent news, CrowdStrike Holdings has reported significant developments in its financial performance and analyst evaluations. The company showcased a net new annual recurring revenue (ARR) of $224 million in the fourth quarter, exceeding expectations. CrowdStrike’s revenue guidance indicated a 21% year-over-year growth, which was above consensus, although its forecasted operating margins fell short of expectations. Analysts from UBS, Mizuho (NYSE:MFG), JPMorgan, Citizens JMP, and Raymond (NSE:RYMD) James have adjusted their price targets for the company, reflecting these financial results and future projections.

UBS lowered its price target to $425 while maintaining a Buy rating, citing strong platform adoption but noting potential operating margin compression. Mizuho also reduced its price target to $410, keeping an Outperform rating, and highlighted CrowdStrike’s strong ARR and cloud security platform. JPMorgan maintained a $450 target with an Overweight rating, emphasizing the company’s robust performance and future growth potential. Citizens JMP reaffirmed a $400 target, praising CrowdStrike’s recovery from past challenges and innovation in AI.

Raymond James increased its price target to $390, acknowledging the company’s potential for growth acceleration in the upcoming fiscal year. Across these analyses, CrowdStrike’s strategic initiatives and product innovations, particularly in cloud security and AI, were consistently highlighted as key factors contributing to its competitive positioning and future growth prospects.

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