BofA update shows where active managers are putting money
Investing.com - UBS lowered its price target on CrowdStrike Holdings (NASDAQ:CRWD) to $500 from $545 on Thursday while maintaining a Buy rating on the cybersecurity company. The cybersecurity giant, currently valued at $105.31 billion, has delivered an impressive 60% return over the past year according to InvestingPro data.
The price target adjustment follows CrowdStrike’s second-quarter net new annual recurring revenue (NNARR) of $221 million, which UBS noted was "near the low end of expectations," raising some questions about the company’s second-half revenue guidance.
Despite these concerns, UBS highlighted CrowdStrike’s "very strong" second-half annual recurring revenue (ARR) guidance, with the firm modeling 55% year-over-year growth in the third quarter and 32% year-over-year growth in the fourth quarter, driving overall ARR growth acceleration in the third quarter and subscription revenue growth acceleration in the fourth quarter.
The analyst report emphasized CrowdStrike’s continued strong platform adoption across modules, with Security Information and Event Management (SIEM) standing out at 95% year-over-year growth, and noted increased confidence in the company’s ability to gain market share in identity security. InvestingPro analysis reveals 31 analysts have revised their earnings upward for the upcoming period, suggesting strong confidence in the company’s growth trajectory. Get access to 10+ additional exclusive ProTips and comprehensive analysis with an InvestingPro subscription.
At 41 times calendar year 2027 enterprise value to free cash flow, UBS believes CrowdStrike shares remain attractive for investors, citing expectations of low-20% growth and material free cash flow margin expansion over the next few years. Based on InvestingPro Fair Value calculations, the stock currently appears to be trading above its intrinsic value, suggesting investors should carefully consider entry points.
In other recent news, CrowdStrike Holdings reported strong fiscal second-quarter results, with a notable net new annual recurring revenue (NNARR) of $221 million, marking a 1% year-over-year increase. The company’s solid performance led TD Cowen to maintain its Buy rating with a price target of $500.00, while RBC Capital reiterated an Outperform rating with a price target of $510.00, citing a favorable outlook for annual recurring revenue (ARR). KeyBanc also reaffirmed its Overweight rating, highlighting a $15 million beat on ARR, although this was below the trailing twelve-month average. Despite these positive earnings, Bernstein lowered its price target to $343.00 due to underwhelming guidance, noting a decline in year-over-year subscription growth to 20.1%. Cantor Fitzgerald maintained its Overweight rating and a $475.00 price target, acknowledging that while CrowdStrike exceeded expectations, conservative guidance metrics affected investor sentiment. The company raised its full-year operating income and EPS guidance, yet kept the high end of its previous revenue outlook. These developments reflect a mix of positive earnings results and cautious future guidance, influencing analysts’ perspectives on the company’s valuation.
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