BMO Capital Lowers CrowdStrike Price Target to $450, Maintains Outperform Rating

BMO Capital has reduced CrowdStrike's (CRWD) price target from $460 to $450 and maintained an Outperform rating. Analysts have concerns about net new annual recurring revenue impacting fiscal year 2027 revenues and uncertainty about potential variations in the fiscal year 2027 estimates. CrowdStrike specializes in cloud-based cybersecurity solutions and has a market capitalization of approximately $110.17 billion. The company has a robust gross margin of 74.48% and a healthy balance sheet with a current ratio of 1.85 and a debt-to-equity ratio of 0.23.

BMO Capital has lowered its price target for CrowdStrike Holdings (CRWD) to $460 from $500 while maintaining an Outperform rating. The adjustment comes amidst concerns about the company's potential net new annual recurring revenue (ARR) growth in fiscal year 2027 and uncertainties surrounding the fiscal year 2027 estimates. Despite the positive channel checks reported in the July quarter, BMO expressed caution ahead of CrowdStrike's upcoming earnings report, particularly regarding the guidance for the second half of fiscal year 2026 [1].

CrowdStrike, a leading provider of cloud-based cybersecurity solutions, reported a record Q2 net new ARR of $221 million and reacceleration ahead of expectations in its fiscal second-quarter 2026 earnings report. The company achieved an ARR growth of 20% year-over-year, reaching $4.66 billion, and delivered record Q2 cash flow from operations of $333 million and free cash flow of $284 million [2]. However, the company's strong execution and business momentum may not be sufficient to drive significant share price appreciation in the near term, according to BMO's analysts.

The price target reduction reflects BMO's view that CrowdStrike would need to grow ARR and revenues by at least 22-23% year-over-year in fiscal year 2027 to drive significant share price appreciation. This level of growth is not part of BMO's base case scenario for the cybersecurity provider. Additionally, the upcoming earnings report is seen as critical for the company, with some analysts suggesting that it could significantly impact CrowdStrike's stock price.

In other recent news, CrowdStrike has launched the Falcon Next-Gen Identity Security solution and introduced AI-powered Signal detection engines at Black Hat USA 2025. These developments aim to enhance the company's offerings and maintain its competitive edge in the cybersecurity market. Despite these advancements, the market remains uncertain about CrowdStrike's ability to sustain its growth momentum and meet investor expectations.

CrowdStrike's robust gross margin of 74.48% and healthy balance sheet, with a current ratio of 1.85 and a debt-to-equity ratio of 0.23, provide a solid foundation for the company's future growth. However, the company's ability to achieve the required growth in ARR and revenues in fiscal year 2027 will be crucial in determining its future performance and stock price trajectory.

References:
[1] https://www.investing.com/news/analyst-ratings/crowdstrike-stock-price-target-lowered-to-460-at-bmo-on-growth-concerns-93CH-4208410
[2] https://ir.crowdstrike.com/news-releases/news-release-details/crowdstrike-reports-second-quarter-fiscal-year-2026-financial