Will CrowdStrike Have A Weak Q2? 4 Analysts On 'Solid' Q1 Print, Macro Pressures

Shares of CrowdStrike Holdings Inc CRWD tanked in early trading on Thursday, despite the company reporting upbeat earnings for its first quarter.

The report came amid an exciting earnings season. Here are some key analyst takeaways from the earnings release.

• Guggenheim Securities analyst John DiFucci maintained a Buy rating, while raising the price target from $156 to $162.
• Needham analyst Alex Henderson reiterated a Buy rating and price target of $170.
• Truist analyst Joel Fishbein reaffirmed a Buy rating and price target of $175.
• William Blair analyst Jonathan Ho maintained an Outperform rating on the stock.

Check out other analyst stock ratings.

Guggenheim Securities

CrowdStrike’s fiscal first-quarter results were “respectable” and its guidance for the second quarter and fiscal 2024 was “similar,” DiFucci said in a note.

The company recorded its first ever decline in new annual recurring revenue, while net revenue retention “continued to moderate,” the analyst stated. “We don’t believe this detracts from the best-in-class characteristics of this company, but we consider this the result of broad macro softness, which we believe will continue for a prolonged period, though the market seems to have other ideas of late."

Needham

CrowdStrike’s results were “solid,” Henderson said. The pressure on the stock since the earnings release is due to “inflated expectations more than Crowd's execution.”

“CrowdStrike offered strong commentary on its pipeline noting it's up "double-digits" Q-Q with cleaner deals, more qualified deals and better line of site to closure,” the analyst wrote. “Deal metrics are improving even as management offered a 'conservative guide' by only raising the current quarter and year modestly reflecting the macro conditions,” he added.

Truist Securities

“We continue to be encouraged by the strength in the company’s underlying business as even in a weakening macro, CRWD displayed significant operating leverage,” Fishbein said in a note.

“CRWD wasn't immune to macro pressures as management called out longer deal cycles, however, the company saw success across its platform, benefiting from vendor consolidation and strength in its emerging product solutions,” the analyst added.

William Blair

Although CrowdStrike’s net new ARR was “solid,” management guided to “a 10% headwind in the first half, implying a weaker second quarter,” Ho said.

“Macro pressures led to elongated sales cycles and additional deal scrutiny with the environment worsening sequentially,” he added. The weakness in the stock represents a “buying opportunity as we believe the results were still strong and our longer-term thesis is unchanged."

CRWD Price Action: Shares of CrowdStrike had declined by 5.91% to $150.67 at the time of publishing Thursday.