Barclays and Benchmark both raised their price targets on CrowdStrike, with Barclays analysts citing strong channel checks as the reason for their optimism.
- Benchmark identified AI Security, AI Detection and Response, Project QuiltWorks, Cloud Security, Next-Gen SIEM and Identity Protection as potential growth accelerators for CrowdStrike.
- The firm raised its price target to $250 from $230 and maintained a ‘Buy’ rating on the shares.
- Barclays models CrowdStrike’s new net annual recurring revenue at $285 million and sees an upside case of more than $300 million.
Shares of CrowdStrike Holdings Inc. (CRWD) are in focus after analysts at Benchmark said that the company could beat second-quarter (Q2) expectations across the board, ahead of CrowdStrike’s earnings scheduled for next week.
According to TheFly, Barclays and Benchmark both raised their price targets on CrowdStrike, with Barclays analysts citing strong channel checks as the reason for their optimism.
CrowdStrike shares were down about 0.5% in Tuesday’s pre-market trade.
Benchmark Sees Multiple Growth Catalysts For CRWD
Benchmark expects CrowdStrike to beat Q2 consensus estimates across annual recurring revenue, revenue, operating income and free cash flow.
The firm identified AI Security, AI Detection and Response (AIDR), Project QuiltWorks, Cloud Security, Next-Gen SIEM and Identity Protection as potential growth accelerators for CrowdStrike.
Benchmark raised its price target to $250 from $230 and maintained a ‘Buy’ rating on the shares. At the same time, the firm noted that CrowdStrike’s 83% year-to-date gain has raised the bar for execution.
CrowdStrike is expected to report earnings per share (EPS) of $0.29 on revenue of $1.43 billion in Q2, according to Fiscal.ai data. While announcing its first-quarter (Q1) results in June this year, the company forecast EPS in the $1.16 to $1.17 range on revenue of $1.43 billion to $1.44 billion.
Barclays Sees $300M-Plus ARR Upside For CRWD
Barclays raised its price target on CrowdStrike to $235 from $169 while maintaining an ‘Overweight’ rating ahead. The firm models CrowdStrike’s new net annual recurring revenue (ARR) at $285 million and sees an upside case of more than $300 million, based on what it described as “strong” channel checks.
Barclays said the potential upside is supported by its checks ahead of the earnings report. The analyst also pointed to CrowdStrike’s upcoming analyst day at Fal.Con, saying it “could create a follow-through catalyst” for the shares.
The analyst told investors in a research note that CrowdStrike’s Q2 report and subsequent Fal.Con analyst day will be key events for the shares.
CRWD Could Benefit From Rising AI Cyber Threats, Believes Morningstar
Morningstar said CrowdStrike could benefit as increasingly capable AI models expand the cybersecurity threat landscape. The firm said the recent breach of Hugging Face by OpenAI’s models highlights the growing offensive capabilities of frontier AI and could drive greater demand for defensive cybersecurity.
Morningstar said the incident showed the “asymmetry of AI cyber offense and legacy cyber defense,” noting that Hugging Face also used a leading AI model to analyze and contain the breach. The firm said that defensive AI adoption could become “table stakes” in the near- to medium-term.
The firm said it remains optimistic that AI will drive cybersecurity spending, while noting that valuations across its cyber coverage already reflect that optimism. CrowdStrike is among the wide-moat cybersecurity companies included in Morningstar’s coverage.
What Retail Traders Think Of CRWD Stock
Retail sentiment on Stocktwits around CrowdStrike trended in the ‘bearish’ territory at the time of writing.
CRWD stock is up 83% year-to-date and 100% over the past 12 months. The S&P 500 ETF (SPY) is up 20% over the past 12 months, while the Invesco QQQ Trust ETF (QQQ) is up 26%.
The Vanguard S&P 500 ETF (VOO) and the iShares Core S&P 500 ETF (IVV) are up 20% during this period.
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