On Monday, Truist Securities updated its outlook on shares of CrowdStrike Holdings (NASDAQ:CRWD), increasing the cybersecurity firm's price target from $325.00 to $375.00 while reaffirming a Buy rating. The adjustment comes ahead of CrowdStrike's third-quarter fiscal year 2025 earnings report, set to be released after the market close on November 26.
The company had previously endured a Global IT outage on July 19, which impacted the final two weeks of the quarter, traditionally a critical period for deal closures. This event led to an estimated $60 million in transactions being deferred. Despite these challenges, CrowdStrike surpassed market expectations, with management highlighting that the delayed deals were still active in the sales pipeline.
Analysts are keen to observe the Q3 earnings for closure of the delayed deals and to assess any lasting effects the IT outage may have on CrowdStrike's business model. Following the outage, the company revised its FY25 guidance downward, accounting for potential delays in client acquisition, longer sales cycles, and heightened deal scrutiny.
The firm has introduced customer commitment packages to bolster long-term adoption of its Falcon platform. While these packages are expected to temporarily reduce the value of upsells and cause a spike in contract lengths, they are included in the company's guidance.
The packages are anticipated to impact new annual recurring revenue (ARR) and subscription ARR by $60 million, with professional services revenue seeing a "high single-digit" million-dollar decrease in the second half of FY25.
In other recent news, Delta Air Lines (NYSE:DAL) is seeking legal action against CrowdStrike over a significant global outage in July, which led to widespread flight cancellations impacting approximately 1.3 million customers and financial losses exceeding $500 million.
The airline attributes this disruption to a faulty software update from CrowdStrike. In the meantime, CrowdStrike has formed a partnership with Plurilock Security Inc. to deliver comprehensive visibility and real-time protection across enterprise environments, enhancing protection for critical infrastructure.
Analyst firms have been active in their assessment of CrowdStrike's position. Wedbush Securities initiated coverage on CrowdStrike, assigning an Outperform rating, emphasizing the company's robust platform adoption and momentum in key areas. TD Cowen reiterated its Buy rating on CrowdStrike, expecting strong growth by the second half of 2026.
KeyBanc also demonstrated optimism, raising the price target for CrowdStrike following new product announcements at the Fal.Con 2024 user conference. These are the recent developments for CrowdStrike, a leader in cloud-delivered endpoint protection.
InvestingPro Insights
As CrowdStrike prepares to release its Q3 fiscal year 2025 earnings, InvestingPro data provides additional context to the company's financial position. Despite the challenges faced, including the Global IT outage, CrowdStrike has demonstrated strong revenue growth, with a 33.07% increase in the last twelve months as of Q2 2025. This growth aligns with the company's ability to surpass market expectations even in the face of adversity.
InvestingPro Tips highlight that CrowdStrike holds more cash than debt on its balance sheet, which could provide a buffer against potential financial impacts from the IT outage and the introduction of customer commitment packages. Additionally, analysts predict the company will be profitable this year, supporting Truist Securities' optimistic outlook and Buy rating.
The company's high valuation multiples, including a P/E ratio of 477.37, suggest that investors have high expectations for future growth. This is further supported by the strong return of 62.61% over the last year, indicating market confidence in CrowdStrike's business model and growth prospects.
For readers interested in a deeper analysis, InvestingPro offers 14 additional tips for CrowdStrike, providing a comprehensive view of the company's financial health and market position.
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