UBS cuts CrowdStrike price target to $425, maintains Buy rating

On Wednesday, UBS analyst Fatima Boolani adjusted the price target for CrowdStrike Holdings stock, trading on (NASDAQ:CRWD), to $425 from the previous $450 while sustaining a Buy rating on the shares. The revision followed CrowdStrike’s fourth-quarter results, which showcased a net new annual recurring revenue (ARR) of $224 million, surpassing expectations. With a current market capitalization of $96.1 billion and an impressive revenue growth of 31.35% over the last twelve months, InvestingPro analysis indicates the stock is currently trading above its Fair Value. Boolani noted a lack of clarity regarding the timing and extent of a second-half net new ARR reacceleration.

CrowdStrike’s revenue guidance indicated a 21% year-over-year growth, which was above the consensus. Despite this, the forecast for operating margins fell short of expectations, with the company guiding to a 20% operating margin, slightly improved by more than one percentage point due to changes in Non-GAAP adjustments. According to InvestingPro, which offers comprehensive analysis through its Pro Research Reports covering 1,400+ US stocks, the company maintains a strong gross profit margin of 75.24% and a healthy current ratio of 1.86. Boolani’s analysis anticipates a two-point compression in operating margin by fiscal year 2026.

Furthermore, Boolani remarked on the forecasted free cash flow (FCF) margin, which is expected to return to approximately 27% by the fourth quarter of fiscal year 2026. UBS has adjusted its full-year FCF margin projection to 26%, a decrease from the previous 30%. Despite these pressures, Boolani expressed a belief that the financial model may still contain conservative estimates. She highlighted the strong adoption metrics of CrowdStrike’s platform, including $900 million in Cloud and SIEM ARR growing at 60% year-over-year, and management’s confidence in competition and churn as they move into fiscal year 2026. InvestingPro data shows the company maintains a "GOOD" overall financial health score, with particularly strong growth and momentum metrics.

The adjustment in the price target comes as CrowdStrike’s stock has declined 22% since the mid-February peak. With a remarkable six-month price return of 52.15% and a P/E ratio of 757.16, investors seeking deeper insights can access over 12 additional exclusive ProTips and comprehensive valuation metrics through InvestingPro. Boolani concluded that, based on the current valuation of 46 times the calendar year 2026 estimated enterprise value to free cash flow, CrowdStrike shares are attractively priced.

In other recent news, CrowdStrike Holdings reported a significant increase in its annual recurring revenue (ARR), reaching $4.24 billion, which exceeded analyst expectations. Despite this strong performance, the company’s earnings per share estimates were lowered due to a higher anticipated tax rate, and free cash flow is expected to remain lower until fiscal year 2027. JPMorgan continues to hold a positive outlook on CrowdStrike, maintaining an Overweight rating and a $450 price target, noting the company’s robust engagement with emerging products. Meanwhile, Mizuho (NYSE:MFG) Securities adjusted its price target for CrowdStrike to $410, maintaining an Outperform rating, highlighting the company’s strong cloud security platform and market expansion efforts.

Raymond (NSE:RYMD) James also expressed optimism, increasing its price target to $390 and emphasizing CrowdStrike’s potential for growth acceleration in the second half of the fiscal year. Citizens JMP reaffirmed a Market Outperform rating with a $400 target, praising the company’s recovery from past challenges and its innovation in artificial intelligence. Jefferies adjusted its price target to $425, maintaining a Buy rating, citing concerns over near-term free cash flow uncertainties but expressing confidence in CrowdStrike’s market position. These recent developments underscore the diverse analyst perspectives on CrowdStrike’s financial health and growth trajectory.

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