KeyBanc cuts CrowdStrike price target to $450, maintains Overweight

Published 05/03/2025, 08:56
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On Wednesday, KeyBanc Capital Markets adjusted its financial outlook for CrowdStrike Holdings, a leader in cloud-delivered endpoint and cloud workload protection. Analyst Eric Heath reduced the price target on CrowdStrike stock (NASDAQ:CRWD) to $450 from the previous target of $480, while reiterating an Overweight rating on the shares. According to InvestingPro data, CrowdStrike’s stock currently trades at $390.16, with analyst targets ranging from $301 to $506. The company appears overvalued based on InvestingPro’s Fair Value analysis, though it maintains a "GOOD" overall financial health score.

The adjustment followed CrowdStrike’s fourth fiscal quarter earnings, which outperformed expectations in both revenue and earnings. Despite this, the company’s fiscal year 2026 guidance presented a mix of positive and less favorable projections. CrowdStrike reported robust sequential growth in net new annual recurring revenue (NNARR), excluding a significant federal deal from the third fiscal quarter. The company’s Falcon Flex (NASDAQ:FLEX) bookings surpassed $1 billion, and its security information and event management (SIEM) segment saw a growth of over 120% year-over-year. Additionally, CrowdStrike maintained high gross retention rates at 97%. InvestingPro data reveals impressive revenue growth of 31.35% over the last twelve months, with a strong gross profit margin of 75.24%. For deeper insights into CrowdStrike’s financial health and growth prospects, investors can access the comprehensive Pro Research Report available on InvestingPro.

Management has decided to discontinue the customer concession programs (CCPs) offered following an outage in July, as the incident is now several quarters past. While the first fiscal quarter NNARR guidance was slightly positive, the fiscal year 2026 outlook was mixed. Revenue projections exceeded expectations, but margin forecasts fell short due to planned investments in platform resiliency, AI efficiencies, sales and marketing costs related to CCPs, and increased marketing expenses. The company operates with a moderate level of debt, maintaining a healthy current ratio of 1.86, according to InvestingPro data, which suggests strong liquidity to support these investments.

The company did not provide a specific annual recurring revenue (ARR) forecast for fiscal year 2026 but did confirm expectations for an acceleration in NNARR in the second half of fiscal year 2026, with further acceleration anticipated in fiscal year 2027. CrowdStrike’s guidance for earnings before interest and taxes (EBIT) and free cash flow (FCF) margins for fiscal year 2027 are approximately 23% and 30%, respectively, aligning with consensus estimates.

In response to these developments, KeyBanc has increased its ARR and revenue estimates for CrowdStrike for fiscal years 2026 and 2027, while slightly reducing its FCF estimates for fiscal year 2027. The revised price target reflects the firm’s updated expectations and ongoing confidence in CrowdStrike’s market position and growth potential.

In other recent news, CrowdStrike Holdings, Inc. reported its fourth-quarter 2025 earnings, surpassing analysts’ expectations. The company achieved an earnings per share (EPS) of $1.03, outperforming the forecast of $0.86, and reported revenue of $1.06 billion, exceeding the anticipated $1.03 billion. Despite these positive results, CrowdStrike’s stock experienced a decline in after-hours trading. The company also noted a significant increase in total contract value, which rose by 40% year-over-year to $6 billion. In terms of future expectations, CrowdStrike projects FY2026 revenue growth between 20-22%, aiming to reach $4.74 billion to $4.81 billion. Additionally, the company highlighted its ongoing commitment to leveraging AI in cybersecurity, which it believes will play a crucial role in future growth. Looking ahead, CrowdStrike plans to accelerate its net new annual recurring revenue (ARR) in the second half of FY2026.

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