DA Davidson lifts CrowdStrike stock target to $415, keeps Buy rating

On Wednesday, DA Davidson maintained a positive stance on CrowdStrike Holdings (NASDAQ:CRWD) by upholding a Buy rating and increasing the price target to $415 from the previous $395. The cybersecurity firm, currently valued at $96.1 billion, delivered strong fourth fiscal quarter results that surpassed expectations, showcasing a robust net new annual recurring revenue (NNARR) of $224 million, which exceeded the consensus estimate of approximately $195 million. With an impressive gross margin of 75.24% and revenue growth of 31.35%, the company’s performance remains solid. Even when adjusted for a $56 million impact from the Customer Relationship Management (CRM) Customer Protection Program (CCP), the NNARR decline was a mere 1% year-over-year. According to InvestingPro analysis, CrowdStrike maintains a GOOD financial health score, with 12 additional key insights available to subscribers.

The company’s forward guidance, trading at a notably high P/E ratio of 757.16, did not meet market expectations. The projection for the first fiscal quarter’s NNARR was slightly under the consensus, which DA Davidson suggests might be a conservative estimate. Additionally, the operational income, earnings per share (EPS), and free cash flow (FCF) for the first quarter and fiscal year 2026 were all guided or implied to be below expectations. InvestingPro’s Fair Value analysis suggests the stock is currently overvalued, though detailed valuation metrics and comprehensive analysis are available in the Pro Research Report, part of the extensive coverage of 1,400+ US stocks.

Despite the conservative guidance for the near term, management expressed confidence in the acceleration of NNARR and margin expansion in the second half of fiscal year 2026. They anticipate operating margins (OMs) of 23% and FCF margins exceeding 30% for fiscal year 2027, aligning with consensus estimates. Furthermore, CrowdStrike’s long-term targets include achieving 34-38% FCF margins by fiscal year 2029 and reaching $10 billion in annual recurring revenue (ARR) by fiscal year 2031.

DA Davidson’s analyst cited these projections in the decision to raise the price target, signaling confidence in CrowdStrike’s growth trajectory and financial goals. The firm’s performance and management’s outlook suggest a strong position in the cybersecurity market, with expectations of continued expansion and profitability in the upcoming years.

In other recent news, CrowdStrike Holdings reported its fourth-quarter 2025 earnings, exceeding analysts’ expectations with an earnings per share (EPS) of $1.03 against a forecast of $0.86, and revenue of $1.06 billion, surpassing the anticipated $1.03 billion. Despite the strong financial performance, the company’s stock experienced a decline. Evercore ISI raised its price target for CrowdStrike to $450 from $400, citing the company’s surpassing fourth-quarter results and a positive outlook for future growth, driven by customer renewals and upsells. KeyBanc Capital Markets, however, adjusted its price target for CrowdStrike to $450 from $480 while maintaining an Overweight rating, noting mixed fiscal year 2026 guidance with strong revenue projections but lower margin forecasts due to planned investments.

BMO Capital Markets also updated its outlook on CrowdStrike, increasing the price target from $380 to $405, maintaining an Outperform rating. The firm highlighted adjustments in financial projections, including a decrease in FY26 Free Cash Flow estimates, but expressed confidence in the company’s strategic market position. CrowdStrike’s management has been proactive in addressing challenges from a prior outage, with plans to discontinue customer concession programs and focus on accelerating new annual recurring revenue (NNARR) in the latter half of fiscal year 2026. The company’s total contract value increased by 40% year-over-year to $6 billion, and its operating income rose by 27% year-over-year, reflecting robust demand for its cybersecurity solutions.

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