RBC Capital maintains Outperform rating on CrowdStrike stock

Published 03/06/2025, 22:32
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On Tuesday, RBC Capital analysts reiterated an Outperform rating and a $500 price target for CrowdStrike Holdings (NASDAQ: NASDAQ:CRWD), which currently trades at $488.73. According to InvestingPro data, the stock is trading near its 52-week high with a remarkable 55% return over the past year. The reaffirmation follows the company’s recent financial performance, which showed mixed results. While revenue was in line with RBC’s estimates and the midpoint of guidance, it slightly missed consensus expectations. However, the company’s non-GAAP net annual recurring revenue (NNARR) of $193.8 million exceeded consensus estimates, despite being down 8.5% year-over-year.

CrowdStrike’s total annual recurring revenue (ARR) reached $4,435.6 million, marking a 22% year-over-year increase. This figure slightly surpassed the consensus estimate of $4,416.6 million. The company’s revenue growth remains strong at 29.4% year-over-year, with total revenue reaching $3.95 billion. Free cash flow stood at $279.4 million, representing a 25.3% margin. InvestingPro analysis shows the company maintains a healthy financial position with a current ratio of 1.77, indicating strong liquidity. Notably, 48% of CrowdStrike’s subscription customers have adopted more than six cloud modules.

Management highlighted the quarter’s achievements, including a record large deal and momentum with managed security service providers (MSSPs). They reported a 97% gross retention rate and emphasized advancements in areas such as artificial intelligence, next-generation security information and event management (SIEM), and cloud identity management. These efforts are part of the company’s strategy to reach a $10 billion ARR goal.

The company also announced a new $1 billion share repurchase program, signaling confidence in its future performance. Despite lowering revenue guidance for the second quarter, CrowdStrike raised guidance for all profitability metrics and full-year projections. Looking ahead, InvestingPro analysts forecast 21% revenue growth for FY2026, with expected earnings per share of $3.50. The management expressed optimism about the potential for NNARR re-acceleration and margin expansion in the second half of 2026, supported by a strong pipeline. For deeper insights into CrowdStrike’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

CrowdStrike’s conference call is scheduled for 5:00 pm ET, where further details about the company’s performance and future plans are expected to be discussed.

In other recent news, CrowdStrike Holdings reported its first-quarter FY2026 results, with revenue reaching $1.1 billion, marking a 20% increase year-over-year. The company’s operating income was $201.1 million, exceeding market expectations. Following these results, Truist Securities maintained its Buy rating for CrowdStrike, citing strong performance and potential benefits from vendor consolidation. Wedbush analysts raised their price target for CrowdStrike to $525, expressing confidence in the company’s growth trajectory and cross-selling opportunities. Similarly, Rosenblatt increased its price target to $515, noting the impact of IT consolidation on CrowdStrike’s performance. JPMorgan also raised its price target to $500, highlighting growth potential and profitability improvements. Meanwhile, Cantor Fitzgerald reaffirmed its Overweight rating with a price target of $475, acknowledging potential near-term constraints but maintaining confidence in CrowdStrike’s long-term prospects. These developments indicate a general consensus among analysts about CrowdStrike’s strong market position and future growth potential.

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