On Wednesday, RBC Capital adjusted its outlook on CrowdStrike Holdings (NASDAQ:CRWD), increasing the price target to $420 from the previous $357, while sustaining an Outperform rating on the stock. The revision follows CrowdStrike's recent financial performance, which surpassed investor expectations, showcasing a robust quarter and a promising future outlook.
The company's growth was highlighted by a 34% increase in Annual Recurring Revenue (ARR), a 33% surge in revenue, and a 33% Free Cash Flow (FCF) margin. The positive results were attributed to broad-based momentum and significant traction in securing large deals.
This performance comes in the context of spending concerns raised by peers in the cybersecurity sector, yet CrowdStrike has continued to execute effectively and consolidate cybersecurity spending.
RBC Capital's analyst noted that CrowdStrike remains a top long-term pick in the cybersecurity industry. The firm's decision to maintain the Outperform rating reflects its confidence in CrowdStrike's ongoing success.
The increased price target is also based on higher estimates and a target multiple of 21 times the calendar year 2025 estimated Enterprise Value to Sales (EV/S), up from the prior multiple of 18.5.
CrowdStrike's ability to outperform despite broader industry concerns indicates a strong position within the cybersecurity market. The company's focus on delivering substantial ARR and revenue growth, coupled with an impressive FCF margin, underscores its operational efficiency and the effectiveness of its growth strategy.
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