DA Davidson lifts CrowdStrike stock target to $415, maintains Buy

On Wednesday, DA Davidson analyst Rudy Kessinger updated CrowdStrike Holdings’ (NASDAQ:CRWD) financial outlook, raising the price target from $395.00 to $415.00 while reaffirming a Buy rating on the stock. The cybersecurity giant, currently valued at $96.1 billion, has demonstrated robust financial health with a 31.35% revenue growth and an impressive 75.24% gross profit margin. This adjustment follows CrowdStrike’s fourth fiscal quarter performance, which surpassed expectations, including a notable Net New Annual Recurring Revenue (NNARR) of $224 million. This figure stands in contrast to consensus estimates of approximately $195 million, or around $280 million after adjusting for a $56 million impact from the Capitalized Contract Costs ( CCC (WA:CCCP)).According to InvestingPro analysis, CrowdStrike is currently trading above its Fair Value, though the stock has shown remarkable momentum with a 52.15% price return over the past six months.

CrowdStrike’s guidance for the first quarter and the fiscal year 2026, however, did not meet the market’s expectations. The company’s forecast for FQ1 NNARR was slightly below consensus, which Kessinger suggests may be a conservative estimate. Additionally, operational income, earnings per share (EPS), and free cash flow (FCF) are all projected to be lower than anticipated. Despite trading at a high P/E ratio of 757.16, InvestingPro data shows the company maintains strong financial health with a "GOOD" overall rating and liquid assets exceeding short-term obligations.

Despite the muted guidance for the near term, CrowdStrike’s management remains optimistic about the company’s performance in the latter half of fiscal year 2026. They expect an acceleration in NNARR and an expansion in margins during this period. The company has forecasted operating margins (OMs) of 23% and free cash flow margins exceeding 30% for fiscal year 2027, aligning with consensus expectations. Moreover, CrowdStrike anticipates achieving free cash flow margins between 34-38% by fiscal year 2029 and reaching $10 billion in Annual Recurring Revenue (ARR) by fiscal year 2031.

Kessinger’s commentary underscores the company’s strong finish to the fiscal year, with the fourth-quarter results demonstrating robust growth in the face of consensus predictions. The analyst’s revised price target reflects confidence in CrowdStrike’s long-term financial goals and the potential for significant financial performance improvements over the next several years.

In other recent news, CrowdStrike Holdings has reported impressive financial results for the fourth quarter of fiscal year 2025, with revenue and annual recurring revenue (ARR) exceeding expectations set by FactSet consensus. However, the company has forecasted a more conservative growth for fiscal year 2026, projecting around 20% revenue growth and a 14% decline in Non-GAAP earnings per share due to a new tax rate. Despite these challenges, analysts from Piper Sandler, Cantor Fitzgerald, Citi, UBS, and Mizuho (NYSE:MFG) have expressed confidence in CrowdStrike’s future prospects. Piper Sandler raised its price target to $400, highlighting the company’s resilience and execution capabilities. Cantor Fitzgerald maintained a $440 price target, noting strong customer loyalty and platform adoption. Citi upheld a $420 price target, acknowledging near-term challenges but seeing positive indicators for the medium term. UBS adjusted its target to $425, citing strong adoption metrics and potential conservative estimates in the financial model. Lastly, Mizuho reduced its target to $410 but maintained an Outperform rating, emphasizing the strength of CrowdStrike’s cloud security platform and go-to-market strategy. These developments reflect a broad confidence among analysts in CrowdStrike’s strategic direction and financial health.

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