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On Wednesday, Bernstein SocGen Group adjusted its outlook on CrowdStrike Holdings (NASDAQ:CRWD) by reducing the price target to $347 from the previous $365, while still affirming an Outperform rating on the company’s shares. Analysts cited the ongoing repercussions of a service outage as a significant factor influencing the decision. According to InvestingPro data, CrowdStrike commands a substantial market capitalization of $96.1 billion and trades at a premium P/E ratio of 757x, reflecting high growth expectations from investors.
CrowdStrike’s fourth fiscal quarter of 2025, which ended in January, saw the company outperform revenue expectations by 2.6% compared to their guidance and 2.4% above the consensus. This was considered a strong performance in light of trends over the past years, with InvestingPro showing impressive revenue growth of 31.35% over the last twelve months. Furthermore, CrowdStrike’s non-GAAP Operating Margin (OpM) exceeded consensus by 220 basis points, and the company maintained a robust Rule-of-40 score in the mid-50s. The company’s strong financial health is reflected in its gross profit margin of 75.24%.
Despite these positive results, CrowdStrike’s stock experienced a nearly 10% decline in after-hours trading. The Net Revenue Retention (NRR) rate, a key metric for measuring customer spend over time, dipped to 112%, marking a new low for the company. Still, InvestingPro data shows the stock has delivered an impressive 52.15% return over the past six months. Additionally, the quarter-over-quarter expansion for existing customers was reported to be the weakest in a considerable period. This slowdown is particularly concerning for CrowdStrike, given its previously lauded rate of expansion with existing customers.
In light of these developments, Bernstein SocGen Group has revised its financial model for CrowdStrike, reflecting a more conservative trajectory for NRR, which is now expected to remain permanently below 115%. The new price target of $347 is derived from a combination of a 50/50 rule-of-40-based multiples regression, applying an 18x multiple with an "outlier halo" status, and a Discounted Cash Flow (DCF) analysis using a 10% Weighted Average Cost of Capital (WACC) and a 3% perpetual growth rate. Despite the price target reduction, the firm maintains its positive Outperform rating on CrowdStrike’s stock. For deeper insights into CrowdStrike’s valuation and 12 additional ProTips, including detailed financial health metrics and growth projections, check out the comprehensive Pro Research Report available on InvestingPro.
In other recent news, CrowdStrike Holdings has reported a strong finish to its fiscal year 2025, with its fourth-quarter performance surpassing expectations in several key areas such as revenue, annual recurring revenue (ARR), earnings per share (EPS), and free cash flow. Despite these results, the company’s guidance for fiscal year 2026 suggests more conservative growth, with projections of approximately 20% growth in top-line revenue and around 15% growth in operating income. Analysts from DA Davidson, Piper Sandler, Cantor Fitzgerald, Citi, and UBS have adjusted their price targets for CrowdStrike, reflecting varying levels of optimism about the company’s future performance. DA Davidson raised the price target to $415, maintaining a Buy rating, while Piper Sandler increased their target to $400, also keeping an Overweight rating. Cantor Fitzgerald reiterated a $440 target, and Citi maintained a $420 target, both with Buy ratings. UBS, however, cut its target to $425 from $450 but still maintained a Buy rating. The company’s net new annual recurring revenue (NNARR) exceeded consensus estimates, although some analysts noted that the figures did not meet more optimistic expectations. CrowdStrike’s management remains optimistic about a recovery in the latter half of fiscal year 2026, with expectations for margin expansion and significant growth in annual recurring revenue in the coming years.
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