CrowdStrike Outperforms Peers Against Tough Macro In Q1, 10 Analysts Comment On 'Top Name To Own In Security'

Zinger Key Points
  • CrowdStrike reported a FQ1revenue beat, with higher subscription revenues and upbeat ARR, one analyst said.
  • The company raised FY revenue guidance, from $3.924B-$3.989B to $3.976B-$4.011B, another analyst added.

Shares of CrowdStrike Holdings Inc CRWD rose by 7.5% to $328.49 at last check Wednesday, after the cybersecurity company reported better-than-expected fiscal first-quarter results.

The results came amid an exciting earnings season. Here are some key analyst takeaways.

  • Wedbush analyst Taz Koujalgi maintained an Outperform rating, while reducing the price target from $390 to $385.
  • Mizuho Securities analyst Gregg Moskowitz reiterated a Buy rating, while cutting the price target from $390 to $370.
  • Oppenheimer analyst Ittai Kidron reaffirmed an Outperform rating, while raising the price target to $400.
  • BMO Capital Markets analyst Keith Bachman reiterated an Outperform rating, while reducing the price target from $425to $410.
  • Cantor Fitzgerald analyst Yi Fu Lee maintained an Overweight rating and price target of $400.
  • RBC Capital Markets analyst Matthew Hedberg reaffirmed an Outperform rating and price target of $420.
  • Piper Sandler analyst Rob Owens maintained an Overweight rating and price target of $400.
  • Needham analyst Alex Henderson reiterated a Buy rating and price target of $425.
  • Goldman Sachs analyst Gabriela Borges maintained a Buy rating and price target of $400.
  • Truist Securities analyst Joel Fishbein reaffirmed a Buy rating and price target of $400.

Check out other analyst stock ratings.

Wedbush: CrowdStrike’s first-quarter revenues of $921 million represent 33% year-on-year growth. They came in higher than Street expectations of $904.6 million. Subscription revenues grew by 34% year-on-year, while ARR (annual recurring revenue) coming in at $3,647 million, with both figures beating consensus estimates, Koujalgi said in a note.

"Strength was driven by continued platform adoption with healthy momentum in Cloud, Identity, and Logscale coupled with better-than-expected results in Data Protection and Charolette AI," the analyst wrote. While momentum declined sequentially, this was against challenging macro and demand trends and exceeded the performance of other software and security companies.

Mizuho Securities: "Despite recent choppy results from numerous software vendors, CRWD reported a good F1Q," Moskowitz wrote in a note. Total ARR came in at $3.65 billion, surpassing expectations.

"CRWD also continues to see strong uptake from its emerging modules, mgmt cited healthy demand for Charlotte AI, and its Falcon Flex program is reducing deal friction," Moskowitz wrote. Management raised the full-year revenue guidance meaningfully, to a range of $3.976 billion to $4.011 billion, from the prior forecast of $3.924 billion to $3.989 billion.

Oppenheimer: CrowdStrike reported robust quarterly results, "beating estimates behind 22% YoY NNARR (net new annual recurring revenue) growth and strong profitability," Kidron said. "The company is executing on its platform selling motion (deals involving Cloud, ITDR, and SIEM doubled YoY) and is seeing promising traction with Falcon Flex, which is helping win large consolidation deals.”

The guidance of double-digit to low-teens year-on-year growth in NNARR seems prudent, given the challenging spending backdrop, the analyst stated. Kidron expects the company to “deliver upside through FY25," citing new products (Data Protection, Falcon for IT and Charlotte AI).

BMO Capital Markets: CrowdStrike's company's upbeat performance, despite a challenging software spending environment, was driven by an increasing number of consolidation deals, Bachman said. NNARR of $3.65 billion exceeded consensus of $197 million.

"We expect net new ARR dollars to continue to increase sequentially over the course of FY25," the analyst wrote. "We believe that CRWD's durable growth will continue to be supported by adoption of non-endpoint modules, and management commented that growth of its data protection, Falcon for IT, and Charlotte AI modules are exceeding expectations," he further stated.

Cantor Fitzgerald: "CrowdStrike delivered a strong start to FY2025," with upside in revenues, NNARR, operating income and free cash flow, Lee said. He added that the company was the "best-performing vendor" among cybersecurity firms in this earnings season.

CrowdStrike is embracing the "platformization" strategy more than its peers, "as exemplified by the number of deals adopting +8 modules expanding at 95% y/y," the analyst stated. CrowdStrike's Platform strategy is working well, "as we are seeing solid onramp in the emerging product segments in Cloud Security, Data Protection, and Falcon for IT," he further wrote.

RBC Capital Markets: CrowdStrike outperformed even against high investor expectations, with a beat and raise quarter, "driven by broad-based momentum and platform consolidation," Hedberg said.

"The company continues to see success in its broader platform with emerging products, and despite a choppier macro in the broader software landscape, continues to execute and consolidate cyber wallet share," the analyst added.

Piper Sandler: CrowdStrike witnessed a "strong demand backdrop," with results ahead of Street expectations and the full-year guidance raised, Owens said. "NNARR growth of >20% in the current environment is impressive in our view, illustrating CRWD’s leadership in security.”

"As core growth drivers in Cloud / LogScale / Identity continue to sustain momentum (deals including 1+ of these were up 100%+ y/y), we remain confident in the forward setup from shares from here," the analyst wrote. He cited CrowdStrike as the "top name to own in security."

Needham: "We foresee continued share gains, expanding margins, strong Cash Flow, robust new products, and a clear unified platform with a single agent, single UI, AI native, and built right with modern design microservices, cloud-native architecture," Henderson wrote in a note.

While the environment has several software and security companies struggling to maintain their momentum, CrowdStrike delivered a "solid beat and raise at scale," he added. The company's ARR growth of 33% and NNARR growth of 22%, with operating margins expanding by 465 basis points (bps) to 21.3% driving 63% earnings growth to 93 cents per share is impressive, the analyst stated.

Goldman Sachs: CrowdStrike delivered a consistent performance, while others reported mixed results for the quarter, Borges said. She added that the company's outperformance as driven by "its ongoing technology leadership" and continued success with the Falcon Flex program.

CrowdStrike has a technology leadership "both with its core endpoint platform and now with the increasing breadth of its extensions into AI workloads, cloud, IT Ops, and observability," the analyst wrote. The Falcon Flex program allows flexible licensing agreements, which lowers friction in the sales process, and now represents more than $500 million in total deal value, she further stated.

Truist Securities: "We continue to be encouraged by the strength in the company's underlying business, as even in a tough macro, CRWD displayed significant operating leverage," Fishbein wrote.

The company "saw success across its platform, benefiting from vendor consolidation and strength in its Cloud Security, LogScale, and Identity modules and saw good initial traction with Charlotte AI," the analyst added.

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