Street Calls of the Week
Investing.com -- CrowdStrike’s long-term growth ambitions took center stage at its investor briefing, with the cybersecurity firm introducing a new $20 billion annual recurring revenue (ARR) target for fiscal 2036, implying a 15% compound annual growth rate.
KeyBanc Capital Markets said CrowdStrike “provided FY27 NNARR guidance of +20% y/y vs. consensus +14% y/y, introduced a FY36 ARR target of $20B (15% CAGR), and demonstrated its strong position to secure agentic AI and provide an autonomous SOC leveraging its Falcon agent and broad, unified platform.”
Analysts noted that the guidance significantly exceeded expectations. “Management guided to FY27 net new ARR growth of 20%, significantly above consensus of 14% y/y growth, and an acceleration over +17% in FY26,” KeyBanc wrote.
The bank noted that the implied FY27 ARR of $6.32 billion, or 22% year-over-year growth, was also higher than the consensus of $6.26 billion.
Profitability targets remained steady. Management projected FY27 EBIT margins above 24% and free cash flow margins above 30%, “both in line with prior guidance,” according to KeyBanc.
The firm also said partner program contra revenue is expected to represent 0.8% of total revenue in FY27 and beyond.
In the nearer term, CrowdStrike reiterated its fiscal 2026 outlook, with management maintaining conviction in “at least 40% net new ARR growth in the back half” of the year.
However, KeyBanc highlighted a headwind from CCP and partner rebates, which management expects will reduce subscription revenue by $15 million in the third quarter and $13 million to $15 million in the fourth quarter.
Following the upbeat guidance, KeyBanc raised its price target on CrowdStrike shares to $510 from $495, maintaining an Overweight rating.