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CrowdStrike Beats Earnings but Stock Takes a Hit: What Analysts Are Saying

MarketDash Editorial Team
5 days ago
CrowdStrike delivered strong fiscal third-quarter results with accelerating revenue growth and record net-new ARR, but investors weren't impressed. Here's how Wall Street analysts are breaking down the cybersecurity giant's performance and what's driving the stock decline.

CrowdStrike Holdings Inc. (CRWD) posted impressive fiscal third-quarter results that would make most companies pop the champagne, but the market had other ideas. Shares slid in Wednesday trading, proving once again that beating expectations isn't always enough when you're priced for perfection.

The cybersecurity powerhouse delivered across the board, with revenue growth reaccelerating and net-new annual recurring revenue hitting levels that turned heads on Wall Street. Yet the stock took a beating anyway, leaving analysts to explain what went right and why investors still headed for the exits.

What the Analysts Are Saying

Wall Street weighed in quickly after the results dropped, with reactions ranging from enthusiastic to cautiously optimistic:

  • Scotiabank analyst Patrick Colville maintained a Sector Outperform rating and bumped his price target from $600 to $613.
  • Canaccord Genuity analyst Kingsley Crane reiterated a Hold rating while raising the price target from $500 to $515.
  • Wedbush analyst Dan Ives reaffirmed an Outperform rating and $600 price target.
  • Rosenblatt Securities analyst Catharine Trebnick maintained a Buy rating and $630 price target.
  • DA Davidson analyst Rudy Kessinger reiterated a Buy rating and $550 price target.
  • BofA Securities analyst Tal Liani reaffirmed a Neutral rating and $535 price target.

The Revenue Story: Better Than It Looks

Scotiabank's Colville noted that CrowdStrike delivered a clean beat and raised guidance on both ARR and revenue, though he admitted the earnings beat was "a bit underwhelming." What caught his attention was management's commitment to 20% net-new ARR growth for fiscal 2027, even with the increased base. "Which is great and nicely puts a floor for next year," he wrote.

Canaccord's Crane was more effusive, calling it among the best quarters in CrowdStrike's history. Net-new ARR jumped 73% year-over-year to $263 million, up from $221 million the previous quarter. Growth in total ARR and subscription revenues reaccelerated, while "operating income guidance was meaningfully raised, while full-year profitability is expected to be back-end loaded," he noted.

The Falcon Platform Spreads Its Wings

Wedbush's Ives highlighted that total ARR grew 23% year-over-year to $4.92 billion, topping the consensus estimate of $4.90 billion. The driver? Net-new ARR of $265.0 million crushing Street expectations of $240.0 million.

The company delivered its strongest NNARR performance ever in Next-Gen SIEM, Falcon Shield, and Cloud, Ives pointed out. Perhaps more interesting is the Falcon Flex program's momentum: "Flex Accounts now have over $1.35 billion in ARR which grew 200% y/y," he wrote.

Rosenblatt's Trebnick noted that revenues hit $1,234.2 million, beating consensus by $20 million, with revenue growth accelerating to 22.5% year-over-year from 21.3% in the prior quarter. However, she observed that "management delivered conservative FY26 top-line guidance, raising the midpoint by $24M and the high-end of the range by just $1M." The Falcon Flex adoption story also caught her attention, with those accounts now representing more than $1.35 billion in ARR.

The Numbers Behind the Narrative

DA Davidson's Kessinger broke down the earnings picture: fiscal third-quarter earnings of 96 cents per share beat consensus of 94 cents per share, while subscription revenue growth reaccelerated to 21% year-over-year from 20% in the previous quarter.

Looking ahead, management guided to fourth-quarter revenues of $1,295.0 million and earnings of $1.10 per share, versus consensus of $1,293.8 million and $1.08 per share. The company also raised full-year guidance to $4,801.6 million in revenue and $3.71 per share in earnings, up from its previous outlook of $4,777.5 million and $3.66 per share.

Why the Stock Dropped Anyway

BofA's Liani offered perhaps the most straightforward explanation for the stock's decline. CrowdStrike reported strong results with ARR and revenue growth of 22.5% and 22.2%, beating Street expectations of 21.9% and 20.2%, respectively. The company saw broad-based growth across most segments.

CrowdStrike is "addressing the right opportunities" with a total addressable market of $140 billion that's expected to grow to $300 billion by 2030, Liani noted. But here's the rub: the stock came under pressure due to "high expectations and elevated valuation," he wrote. Sometimes even great results aren't great enough when you're trading at a premium.

Shares of CrowdStrike had declined 2.30% to $504.68 at the time of publication on Wednesday.

Back to News

CrowdStrike Beats Earnings but Stock Takes a Hit: What Analysts Are Saying

MarketDash Editorial Team
5 days ago
CrowdStrike delivered strong fiscal third-quarter results with accelerating revenue growth and record net-new ARR, but investors weren't impressed. Here's how Wall Street analysts are breaking down the cybersecurity giant's performance and what's driving the stock decline.

CrowdStrike Holdings Inc. (CRWD) posted impressive fiscal third-quarter results that would make most companies pop the champagne, but the market had other ideas. Shares slid in Wednesday trading, proving once again that beating expectations isn't always enough when you're priced for perfection.

The cybersecurity powerhouse delivered across the board, with revenue growth reaccelerating and net-new annual recurring revenue hitting levels that turned heads on Wall Street. Yet the stock took a beating anyway, leaving analysts to explain what went right and why investors still headed for the exits.

What the Analysts Are Saying

Wall Street weighed in quickly after the results dropped, with reactions ranging from enthusiastic to cautiously optimistic:

  • Scotiabank analyst Patrick Colville maintained a Sector Outperform rating and bumped his price target from $600 to $613.
  • Canaccord Genuity analyst Kingsley Crane reiterated a Hold rating while raising the price target from $500 to $515.
  • Wedbush analyst Dan Ives reaffirmed an Outperform rating and $600 price target.
  • Rosenblatt Securities analyst Catharine Trebnick maintained a Buy rating and $630 price target.
  • DA Davidson analyst Rudy Kessinger reiterated a Buy rating and $550 price target.
  • BofA Securities analyst Tal Liani reaffirmed a Neutral rating and $535 price target.

The Revenue Story: Better Than It Looks

Scotiabank's Colville noted that CrowdStrike delivered a clean beat and raised guidance on both ARR and revenue, though he admitted the earnings beat was "a bit underwhelming." What caught his attention was management's commitment to 20% net-new ARR growth for fiscal 2027, even with the increased base. "Which is great and nicely puts a floor for next year," he wrote.

Canaccord's Crane was more effusive, calling it among the best quarters in CrowdStrike's history. Net-new ARR jumped 73% year-over-year to $263 million, up from $221 million the previous quarter. Growth in total ARR and subscription revenues reaccelerated, while "operating income guidance was meaningfully raised, while full-year profitability is expected to be back-end loaded," he noted.

The Falcon Platform Spreads Its Wings

Wedbush's Ives highlighted that total ARR grew 23% year-over-year to $4.92 billion, topping the consensus estimate of $4.90 billion. The driver? Net-new ARR of $265.0 million crushing Street expectations of $240.0 million.

The company delivered its strongest NNARR performance ever in Next-Gen SIEM, Falcon Shield, and Cloud, Ives pointed out. Perhaps more interesting is the Falcon Flex program's momentum: "Flex Accounts now have over $1.35 billion in ARR which grew 200% y/y," he wrote.

Rosenblatt's Trebnick noted that revenues hit $1,234.2 million, beating consensus by $20 million, with revenue growth accelerating to 22.5% year-over-year from 21.3% in the prior quarter. However, she observed that "management delivered conservative FY26 top-line guidance, raising the midpoint by $24M and the high-end of the range by just $1M." The Falcon Flex adoption story also caught her attention, with those accounts now representing more than $1.35 billion in ARR.

The Numbers Behind the Narrative

DA Davidson's Kessinger broke down the earnings picture: fiscal third-quarter earnings of 96 cents per share beat consensus of 94 cents per share, while subscription revenue growth reaccelerated to 21% year-over-year from 20% in the previous quarter.

Looking ahead, management guided to fourth-quarter revenues of $1,295.0 million and earnings of $1.10 per share, versus consensus of $1,293.8 million and $1.08 per share. The company also raised full-year guidance to $4,801.6 million in revenue and $3.71 per share in earnings, up from its previous outlook of $4,777.5 million and $3.66 per share.

Why the Stock Dropped Anyway

BofA's Liani offered perhaps the most straightforward explanation for the stock's decline. CrowdStrike reported strong results with ARR and revenue growth of 22.5% and 22.2%, beating Street expectations of 21.9% and 20.2%, respectively. The company saw broad-based growth across most segments.

CrowdStrike is "addressing the right opportunities" with a total addressable market of $140 billion that's expected to grow to $300 billion by 2030, Liani noted. But here's the rub: the stock came under pressure due to "high expectations and elevated valuation," he wrote. Sometimes even great results aren't great enough when you're trading at a premium.

Shares of CrowdStrike had declined 2.30% to $504.68 at the time of publication on Wednesday.