By Elsa Ohlen
CrowdStrike disappointed investors with forecasts that sales wouldn't pick up as much as hoped following last year's global IT outage, but analysts remain largely bullish on the stock following its Wednesday earnings report.
Jefferies analyst Joseph Gallo noted that the deal to buy privately held data observability platform Onum wasn't included in the guidance, and that upside is possible.
For the current quarter, the cybersecurity company known for its endpoint security platform Falcon sees revenue ranging from $1.21 billion to $1.22 billion, below FactSet estimates of roughly $1.23 billion.
Even as the revenue guidance was lower than many had expected, CrowdStrike nudged the lower-end of its full-year guidance up to $4.75 billion from $4.74 billion. However Gallo said: "It remains a bit unclear to us exactly why revenue wouldn't benefit more from the uptick in ARR [Annual Recurring Revenue], expectations unless CrowdStrike is continuing to discount/incentivize partners which may be a near term revenue headwind."
Gallo has a Buy rating on the stock and lowered the price target to $500 from $530.
Revenue guidance was light and the company's Customer Choice Program (CCP), which aims to retain customers following the 2024 IT outage, continues to bring near-term headwinds.
The major technology outage last summer was caused by a glitch in a software update rolled out by CrowdStrike which crippled Microsoft's PC operating systems, disrupting everything from banks to airlines to stock exchanges. The event led CrowdStrike shares to tumble some 40% over the span of two weeks.
Apart from the revenue guidance, it was a solid quarter. It posted second-quarter adjusted earnings of 93 cents a share, better than analysts' estimates of 83 cents, as revenue of $1.17 billion at the cybersecurity company also topped forecasts.
Yet, shares dropped 3.5% to $408.02 in premarket trading Thursday while futures tracking the S&P 500 were down less than 0.1%.
Annual recurring revenue, or ARR, which measures predictable, recurring revenue generated from subscriptions over a year, grew 20% year-over-year to nearly $4.7 billion in the quarter, beating expectations.
D.A. Davidson analyst Rudy Kessinger also cut the price target on shares to $490 from $530, maintaining a Buy-rating.
Write to Elsa Ohlen at elsa.ohlen@barrons.com
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(END) Dow Jones Newswires
August 28, 2025 08:10 ET (12:10 GMT)
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