Jefferies cuts CrowdStrike price target to $425, keeps Buy rating

On Wednesday, Jefferies analyst Joseph Gallo adjusted the price target for CrowdStrike Holdings (NASDAQ:CRWD) to $425.00, a decrease from the previous target of $450.00, while reaffirming a Buy rating on the stock. According to InvestingPro data, CrowdStrike currently trades at high valuation multiples with a P/E ratio of 757 and maintains a market capitalization of $96.1 billion. The adjustment follows CrowdStrike's fourth-quarter report, which showed a year-over-year annual recurring revenue (ARR) growth of 23%. This figure slightly surpassed consensus estimates, but the company's stock value declined in response to near-term free cash flow (FCF) uncertainties and a guidance for operating income that was more pessimistic than expected, influenced by challenges related to the Chinese Communist Party (CCP).

Gallo highlighted the concerns surrounding whether customers will ultimately pay for modules that are currently free, but he expressed confidence in CrowdStrike's market position and its potential to accelerate net new annual recurring revenue (NNARR) in the second half of fiscal year 2026. The company's strong market position is supported by impressive financial metrics, with revenue growing at 31.35% year-over-year and a healthy current ratio of 1.86. InvestingPro analysis indicates that CrowdStrike maintains a "Good" overall financial health score, with particularly strong growth metrics. His projections include a 21% year-over-year ARR growth in FY26, and he maintains the stance that a low to mid-20s growth rate is attainable for the company.

CrowdStrike's recent performance and the revised price target reflect the company's ongoing navigation through a complex market environment. The company's ability to maintain a strong market position, despite the headwinds, has been a point of confidence for Jefferies. The firm's outlook indicates an expectation for CrowdStrike's growth trajectory to remain robust in the coming years, underpinning the decision to uphold a Buy rating despite the near-term challenges.

The lowered price target signifies a more cautious valuation of CrowdStrike's stock in the face of current uncertainties. Nevertheless, Jefferies' analysis suggests that the company's long-term fundamentals remain solid. Investors and market watchers will be closely monitoring CrowdStrike's performance to see if the cybersecurity firm can deliver on the growth and market position confidence expressed by Jefferies. With a five-year revenue CAGR of 65% and analyst consensus remaining bullish, detailed analysis and additional insights are available through InvestingPro 's comprehensive research report, which includes over 30 key metrics and expert analysis.

In other recent news, CrowdStrike Holdings has reported fourth-quarter earnings for 2025 that exceeded analysts' expectations, with an earnings per share (EPS) of $1.03 against a forecast of $0.86, and revenue reaching $1.06 billion, surpassing the anticipated $1.03 billion. Despite this performance, the company's forward guidance for fiscal year 2026 did not meet market expectations, as projections for net new annual recurring revenue (NNARR) and other financial metrics were below consensus estimates. Analysts from DA Davidson, BMO Capital Markets, Evercore ISI, and KeyBanc have adjusted their price targets for CrowdStrike, reflecting varying degrees of optimism about the company's future.

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DA Davidson raised its price target to $415, maintaining a Buy rating, while BMO Capital Markets increased its target to $405, keeping an Outperform rating. Evercore ISI set a new price target of $450, also retaining an Outperform rating, citing a positive shift in the company's financial outlook. Conversely, KeyBanc reduced its target to $450 but maintained an Overweight rating, noting mixed guidance for fiscal year 2026. CrowdStrike's management has expressed confidence in future growth, projecting an acceleration in NNARR and margin expansion in the latter half of fiscal year 2026, with expectations to achieve significant operating and free cash flow margins by fiscal year 2027.

The company's strategic initiatives, including the introduction of Falcon Flex (NASDAQ:FLEX), are anticipated to drive module adoption and customer expansion, contributing to its long-term growth objectives. Despite some near-term challenges, analysts remain largely positive about CrowdStrike's position in the cybersecurity market, with expectations for continued expansion and profitability in the coming years.

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