CrowdStrike Stock Rallies. Wall Street Just Got a Nice Surprise.

CrowdStrike shares are up 30% so far this year, outpacing the S&P 500. (Dreamstime)

Key Points

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• CrowdStrike shares rose 11% after its Fal.Con conference, where it showcased new AI products and addressed ARR growth.
• Analysts raised price targets, with KeyBanc’s Eric Heath now at $510, citing CrowdStrike’s AI and Falcon platform.
• Guggenheim noted CrowdStrike’s confidence in doubling ARR every five years, projecting $20 billion by fiscal year 2036.

CrowdStrike stock was one of the biggest gainers in the S&P 500 on Thursday. Wall Street analysts are increasing their price targets on shares of the cybersecurity firm after the company’s Fal.Con conference and investor meeting.

Shares were up 11% to roughly $492 in Thursday trading. Coming into the trading session, shares are up about 30% this year.

The move comes after the company’s Wednesday meeting, where it showcased new AI products.

The big surprise was management’s answers to investors’ concerns about a noncommittal view on next year’s annual recurring revenue, or ARR, which measures predictable, recurring revenue generated from subscriptions over a year.

“The most surprising near-term commentary was the 20% growth in FY27 Net New ARR, which is above the consensus estimate of 14% growth,” noted Guggenheim analyst John DiFucci. “It’s interesting to see such confidence in the business to see ARR double every 5 years, from $5B by the end of FY26, to $10B by the end of FY31, to $20B by the end of FY36.” The analyst rates the stock Neutral without a price target.

In August, CrowdStrike said ARR grew 20% year over year to nearly $4.7 billion in the fiscal second quarter, beating expectations.

Mizuho analyst Gregg Moskowitz sees the company’s cloud security platform as differentiated and its go-to-market strategy as unrivaled, and expects its success to extend into higher-growth markets. Moskowitz raised his price target on shares to $475 from $450. However, he reiterated a Neutral rating on shares given CrowdStrike’s rich valuation of 102.1 times forward earnings.

KeyBanc analyst Eric Heath raised his price target to $510 from $495 and maintained an Overweight rating. He cited the company’s strong position in agentic AI and ability to leverage its cybersecurity platform Falcon, which is built in the cloud.

Despite a summer slump, CrowdStrike stock has more than recovered from a big drop in shares in July 2024 when the company created a major technology outage that was caused by a glitch in one of their software updates. It crippled Microsoft PC operating systems, disrupting everything from banks to airlines and stock exchanges.

The stock has gained over 100% since a low point of about $220 in early August 2024.

Write to Elsa Ohlen at elsa.ohlen@barrons.com