CrowdStrike (CRWD.US) stock price tumbles after earnings report, but institutions remain confident. Wall Street unanimously bullish.

After CrowdStrike (CRWD.US) released a lower-than-expected earnings outlook, the stock quickly dropped by about 11% on Wednesday, but Wall Street remains generally optimistic about the stock. Wedbush maintained its "outperform" rating and raised its target price from $390 to $395. Analysts led by Daniel Ives said, "Overall, this quarter once again reaffirms our long-term bullish view on CrowdStrike, as the company continues to be the gold standard in cybersecurity. The interruptions seen mostly in the past and NNARR growth is expected to accelerate again." Analysts noted that CrowdStrike reported strong fourth-quarter earnings for FY2025, with both revenue and profits exceeding expectations, but they were overshadowed by the positive guidance for FY2026 that Wall Street favors. The company will use a higher non-GAAP tax rate to determine non-GAAP net income/earnings per share in order to provide better consistency in reporting for the mid-term periods of FY2026 and beyond. Ives and his team pointed out that despite facing ongoing impacts from the IT disruptions, CrowdStrike has started moving in the right direction since last summer's events, and the pace of transactions is faster than expected. Analysts initially thought the company would lose a significant amount of renewals/new business under the impact of the blackout incident, but the overall retention rate remains above 97%. Analysts pointed out that the impact is more reflected in the sales cycle, which is expected to continue improving quarter by quarter as CrowdStrike is confident in FY2026, with NNARR set to accelerate in the second half. Bank of America Securities reaffirmed their "buy" rating on CrowdStrike and set a target price of $420. Analysts led by Tal Liani said, "Strong performance," with ARR/revenue growth rates at 24%/25%, respectively, compared to Wall Street's expectations of 20%/22%. However, analysts also highlighted some weak areas, including a continued deceleration in net revenue retention rate (NRR) and net new ARR growth rate of -1% excluding CCP, both indicating some difficulties in maintaining upward momentum. Analysts pointed out that operating margin guidance was nearly 400 basis points lower than Wall Street's expectations, partly due to increased operating expenses and changes in SBC accounting methods. Some expenses are related to larger Flex deals and expenses related to the CCP plan, while the change in accounting methods aligns CrowdStrike with industry accounting practices. Liani and his team stated that they have identified these risks, but the core fundamentals remain strong, and they expect ARR growth to accelerate in the second half of this year. Jefferies Financial Group Inc. maintained their "buy" rating on CrowdStrike with a target price of $425. Analysts led by Joseph Gallo said that CrowdStrike reported a 23% year-over-year growth in ARR for the fourth quarter, slightly higher than expected, but the uncertainty of recent free cash flow (FCF) and the resistance from CCP causing operating income guidance to fall short of expectations led to the stock price decline. Gallo and his team said, "Although the risk lies in whether customers will actually pay for the free modules in the end, we are confident in CRWD's market position and believe it will drive the accelerated development of F2H26 NNARR." Nomura reiterated their "outperform" rating but lowered their target price from $450 to $410. Analysts said positive aspects include CrowdStrike ending CCP earlier than they expected, paving the way for accelerated second half earnings reports. They added that the adoption of Falcon Flex is also undergoing changes.