Bernstein SocGen Group has adjusted its outlook on CrowdStrike Holdings (NASDAQ: NASDAQ:CRWD), reducing the stock's price target to $327 from $334, while retaining an Outperform rating.
The revision follows a detailed review of the company's earnings and subsequent discussions which clarified the nature of certain costs and their impact on revenue recognition.
The analyst indicated that initial assumptions about the company's approach to handling costs were revised after further clarification. It was previously thought that the impact of certain costs would be short-term, managed as credits, and with limited effect on revenue beyond FY26.
However, it has now been understood that some contract adjustments, such as discounts or extended terms, will have a prolonged effect on revenue recognition for the duration of the contracts.
Additionally, while some costs may be one-off, such as professional services, others are expected to extend beyond the current fiscal year. The analyst's updated model now reflects a $30 million subscription impact that will persist past the end of this fiscal year, with professional services costs anticipated to decrease in the first half of FY26.
The revised model predicts that the company's net revenue retention (NRR) will be negatively affected for a few more quarters, with an expected rebound as the company laps in the second quarter.
In other recent news, CrowdStrike saw a series of adjustments from various analyst firms following their recent financial results and revised future guidance. FBN Securities lowered its price target for CrowdStrike to $370, citing a software update issue that impacted the company's near-term growth trajectory.
Despite the adjustment, the firm maintained its Outperform rating. CrowdStrike's second fiscal quarter results surpassed expectations in annual recurring revenue (ARR), revenue, and non-GAAP earnings per share, but the guidance for the third fiscal quarter and fiscal year 2025 fell short of consensus estimates.
Deutsche Bank (ETR:DBKGn) raised its price target for CrowdStrike to $285, maintaining a Hold rating, due to the company's Q2 FY25 results, which led to revised revenue forecasts for FY25 and FY26. Argus, on the other hand, reduced its price target to $325, maintaining a Buy rating, citing a software update disruption as a factor.
TD Cowen also lowered CrowdStrike's price target to $380 due to a downward revision in the fiscal year 2025 guidance, but the firm maintained a Buy rating on the stock, asserting confidence in CrowdStrike's long-term prospects.
InvestingPro Insights
In light of Bernstein SocGen Group's recent adjustments to CrowdStrike Holdings' (NASDAQ:CRWD) outlook, it's valuable to consider the company's financial health and market performance for a comprehensive understanding. According to InvestingPro data, CrowdStrike boasts a robust market capitalization of $63.57 billion and has experienced significant revenue growth of 33.07% over the last twelve months as of Q2 2025. This growth is reflected in their substantial gross profit margin of 75.37%, indicating efficient cost management relative to revenue.
An InvestingPro Tip highlights that CrowdStrike holds more cash than debt on its balance sheet, which is a positive sign of financial stability. Additionally, the company is expected to see net income growth this year. However, it's important to note that CrowdStrike is trading at a high earnings multiple, with a P/E ratio of 368.07, which suggests a premium valuation compared to earnings.
Investors may also find it noteworthy that despite a recent price drop over the last three months, CrowdStrike has shown a strong return over the last month. For those considering an investment, it's worth mentioning that there are 38 additional InvestingPro Tips available at Investing.com/pro/CRWD, which provide deeper insights into CrowdStrike's financial metrics and market performance.
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