Morgan Stanley has reiterated its Overweight rating on CrowdStrike Holdings (NASDAQ: NASDAQ:CRWD) with a steady price target of $325.00.
The firm expressed a cautious stance ahead of CrowdStrike's investor day on September 18, citing high consensus forecasts for Annual Recurring Revenue (ARR) and not anticipating positive financial updates due to the recent global outage.
The analyst noted that the longer-term outlook for the company remains positive, despite expectations that net new ARR (NNARR) for the second half of the year will drop by approximately 25% year-over-year, which is less than the roughly 40% decline implied in management's fiscal year 2025 guidance.
The analyst pointed out that CrowdStrike management has already deferred their $10 billion ARR target to fiscal year 2031 during their earnings call and withdrew their fiscal year 2025 free cash flow (FCF) guidance amid uncertainties regarding flexible payment plans.
Currently, CrowdStrike's valuation stands at 31 times Enterprise Value to Calendar Year 2026 Free Cash Flow (EV/CY26 FCF) based on Morgan Stanley's below-consensus forecasts.
In other recent news, JPMorgan maintained an Overweight rating on CrowdStrike, affirming a price target of $330.00, reflecting their confidence in the cybersecurity company's potential for growth and recovery.
In contrast, Susquehanna reduced its price target to $310.00, citing short-term challenges but affirming the company's growth potential.
Bernstein SocGen Group adjusted the stock's price target to $327, maintaining an Outperform rating. FBN Securities also lowered its price target for CrowdStrike to $370, citing a software update issue that impacted the company's near-term growth trajectory, but maintained its Outperform rating.
Deutsche Bank increased its price target for CrowdStrike to $285 due to the company's Q2 FY25 results, which led to revised revenue forecasts for FY25 and FY26.
TD Cowen also adjusted CrowdStrike's price target to $380 due to a downward revision in the fiscal year 2025 guidance, but maintained a Buy rating on the stock.
These adjustments come after CrowdStrike's second fiscal quarter results surpassed expectations in annual recurring revenue, revenue, and non-GAAP earnings per share. However, the guidance for the third fiscal quarter and fiscal year 2025 fell short of consensus estimates. Despite these recent developments, analysts express confidence in CrowdStrike's long-term prospects.
InvestingPro Insights
As investors weigh Morgan Stanley's analysis of CrowdStrike Holdings (NASDAQ:CRWD), real-time data from InvestingPro provides additional context to the cybersecurity firm's financial health and market performance. With a market capitalization of $60.4 billion and a high price-to-earnings (P/E) ratio of 350.6, CrowdStrike's valuation reflects its growth-oriented investor base. The company's revenue has shown robust growth with a 33.07% increase in the last twelve months as of Q2 2025, highlighting its expanding market presence.
An InvestingPro Tip worth noting is that CrowdStrike holds more cash than debt on its balance sheet, indicating a strong liquidity position that could support its operations and strategic initiatives. Additionally, analysts predict the company will be profitable this year, which could be a reassuring sign for long-term investors concerned about profitability amidst a challenging economic environment.
For those interested in deeper analysis, InvestingPro offers 15 additional tips on CrowdStrike, providing a more comprehensive understanding of the company's financial nuances and market potential. The insights from these tips, combined with the latest financial metrics, can help investors make more informed decisions as they anticipate CrowdStrike's investor day and future financial updates.
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