On Wednesday, Susquehanna maintained a Positive rating on CrowdStrike Holdings (NASDAQ:CRWD) and raised the price target to $400 from the previous $310.
The adjustment comes after CrowdStrike reported its third fiscal quarter earnings, which were deemed solid by the firm. Despite a somewhat unclear forecast for the fourth fiscal quarter's net new Annual Recurring Revenue (ARR) growth, the firm's outlook on CrowdStrike remains optimistic.
"We continue to expect the near term to remain choppy as customers digest the impacts of the July outage," the analysts said.
However, CrowdStrike's long-term prospects are strong, they highlighted. The company is expected to continue leveraging its leading position in the endpoint security market and expand into other cybersecurity areas such as cloud, identity, and next-generation Security Information and Event Management (SIEM).
The report noted that CrowdStrike's third fiscal quarter performance showcased the company's robust fundamentals. Although the outlook for net new ARR growth in the upcoming fourth fiscal quarter was not as clear, the firm believes that CrowdStrike's strategic moves position it well for sustained growth.
The analyst's commentary underscored the confidence in CrowdStrike's ability to evolve from a category leader in endpoint security into a comprehensive platform provider. This transition is anticipated as the company ventures further into various cybersecurity segments, continuing to build on its strong market presence.
In other recent news, Scotiabank (TSX:BNS) adjusted its price target on shares of CrowdStrike, increasing it to $300 from the previous target of $265, maintaining its Sector Perform rating. Analyst firms including Evercore ISI, Cantor Fitzgerald, BMO Capital Markets, DA Davidson, and Mizuho (NYSE:MFG) Securities have maintained positive ratings on CrowdStrike, with price targets ranging from $370 to $410.
However, concerns were raised over the decline in new Annual Recurring Revenue (ARR) and a significant contraction in Free Cash Flow (FCF) margins during the third quarter. The guidance provided by CrowdStrike suggests that these issues may persist into the fourth quarter. Despite these challenges, the management of CrowdStrike expressed confidence in the company's ability to regain growth momentum in the latter half of 2025.
Guggenheim analysts expect that CrowdStrike will meet its fourth-quarter guidance without difficulty, although they note that ARR could present some risk. BTIG, maintaining a neutral rating, noted that the impact of a July outage could take more than a few quarters to fully resolve but did not see enough negative data points to significantly alter the outlook for a potential rebound in the second half of fiscal year 2026.
InvestingPro Insights
CrowdStrike's strong market position, as highlighted in Susquehanna's analysis, is further supported by recent financial data and insights from InvestingPro. The company's revenue growth remains robust, with a 33.07% increase in the last twelve months as of Q2 2025, aligning with the analyst's positive outlook on CrowdStrike's expansion into various cybersecurity segments.
InvestingPro Tips indicate that CrowdStrike is expected to be profitable this year, which corroborates Susquehanna's optimistic stance on the company's long-term prospects. Additionally, the company's high return over the last year, with a 73.42% price total return, reflects investor confidence in CrowdStrike's strategic direction.
However, investors should note that CrowdStrike is trading at high valuation multiples, including a P/E ratio of 515.09. This suggests that the market has priced in significant growth expectations, which aligns with the analyst's view on the company's potential but also implies higher investor risk.
For readers interested in a deeper dive into CrowdStrike's financials and market position, InvestingPro offers 15 additional tips, providing a comprehensive analysis to inform investment decisions.
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