CrowdStrike shares fell sharply after the company projected second-quarter revenue of $1.14 billion to $1.15 billion, missing Wall Street’s consensus estimate of $1.16 billion.
This cautious outlook triggered a nearly 6% drop in the stock during after-hours and premarket trading, despite the company’s strong year-to-date performance and a record high just before the earnings release.
The revenue miss has heightened investor concerns about the pace of enterprise cybersecurity spending, especially as macroeconomic pressures and last year’s high-profile software outage continue to weigh on customer sentiment and deal cycles. While CrowdStrike’s Q1 revenue grew 20% year-over-year to $1.10 billion and adjusted earnings per share of $0.73 beat expectations, the outlook for Q2 signaled a possible slowdown in top-line momentum.
Despite the immediate selloff, major brokerages have responded by raising their price targets on CrowdStrike, reflecting confidence in the company’s long-term fundamentals. Susquehanna increased its target to $530, Stephens to $540, and DA Davidson to $530, citing robust annual recurring revenue growth, strong cash flow, and leadership in the cybersecurity sector.
Some analysts, however, have expressed caution about valuation, with BofA Securities downgrading the stock to neutral but still raising its target to $470.
The market’s reaction underscores the high expectations surrounding CrowdStrike’s growth trajectory and the sensitivity to any signs of deceleration. While the company maintained its full-year revenue guidance and raised its adjusted earnings outlook, investors remain focused on how quickly CrowdStrike can reaccelerate growth, particularly as it expands into cloud, identity, and AI-driven security solutions.
In summary, CrowdStrike’s Q2 revenue guidance miss sparked a steep stock pullback, but the company’s operational strength and analyst support suggest that long-term prospects remain intact for this cybersecurity leader.
