Global "blue screen" crisis doesn't affect long-term outlook Baird gives CrowdStrike (CRWD.US) "Outperform" rating

Investment bank Baird said that despite some visibility challenges recently, CrowdStrike's (CRWD.US) latest financial update was mostly positive, and it gave the company a "Outperform" rating with a target price of $315.

CrowdStrike provided several financial updates at its annual cybersecurity conference, and the firm said that while there were some visibility challenges recently, it viewed the updates as mostly positive.

Analyst Shrenik Kothari said, "CrowdStrike remains committed to achieving its $10bn ARR target this fall. However, the near-term visibility challenges following the July 19 global "blue screen" crisis introduced some near uncertainty, leading us to lower our near-term expectations."

Kothari noted that contract extensions and delayed spend "dampened some annual recurring revenue (ARR) momentum," impacting the second half of this year by $60mn.

Despite this, Kothari remains bullish on CrowdStrike's long-term prospects, noting that its ARR in cloud security will be between $250mn and $300mn by fiscal 2031, with identity protection reaching $1bn to $1.5bn and next-generation security information and event management reaching $150mn to $200mn.

The company also said that its broader potential market total will be $250bn by 2029, up from $116bn next year.

"CrowdStrike maintained a 98% total retention rate, highlighting user loyalty and platform stickiness, and the lowest churn. Through the Falcon Flex model and customer commitment packages, the company will continue to deepen relationships with existing customers, focusing on expanding and accelerating module adoption," Kothari said.