Oppenheimer has adjusted its outlook on CrowdStrike Holdings (NASDAQ: NASDAQ:CRWD), reducing the price target to $365 from the previous $450, while keeping an Outperform rating on the stock.
The reduction follows CrowdStrike's second-quarter results, which surpassed expectations and exhibited an 11% growth in net new annual recurring revenue (NNARR), despite the challenges posed by an IT outage on July 19th.
The cybersecurity firm's management has provided revenue guidance for the second half of fiscal year 2025 that falls short of analyst estimates. The conservative forecast is attributed to a $60 million reduction in subscription revenue, with $30 million impacting the third quarter.
This is a result of the Customer Commitment Package, which offers customers higher discounts and free modules to encourage wider adoption of its platform.
CrowdStrike's recent performance indicates resilience in the face of adversity, as the company navigated through the IT disturbance without significant detriments to its growth trajectory.
However, the guidance suggests a more cautious approach in the near term, as the company implements strategies to bolster platform adoption among its customer base.
Looking forward, the firm anticipates that CrowdStrike's stock may experience limited movement until there is clearer visibility into the growth trends for fiscal year 2026 and the potential for NNARR acceleration.
Despite the near-term headwinds and the adjustment in the price target, Oppenheimer reaffirms its confidence in CrowdStrike's long-term growth prospects, emphasizing its position as a top-tier cybersecurity platform.
In other recent news, CrowdStrike reported robust financial results for the second fiscal quarter of 2025. Annual recurring revenue (ARR) reached $3.865 billion, marking a 31.9% year-over-year increase. This performance exceeded both Evercore ISI's and the Street's expectations. The company also reported a record non-GAAP operating income of $227 million, demonstrating a 46% growth from the previous year.
However, CrowdStrike's full-year revenue forecast has been adjusted downward by approximately 3.2 percentage points to a growth of 27.5% year-over-year at the midpoint, equating to a reduction of around $100 million. This revision includes a deferral of approximately $60 million in revenue from the second quarter as part of CrowdStrike's customer commitment package.
In response to a recent IT outage, CrowdStrike introduced new customer commitment packages to mitigate the impact. Despite these measures, Evercore ISI, BTIG, and Guggenheim have maintained a neutral rating for the company, citing uncertainties regarding the outage's long-term repercussions.
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