Morgan Stanley lifts CrowdStrike price target to $238 after strong second-quarter results

Morgan Stanley raised its price target for CrowdStrike to $238 from $227 after the cybersecurity company reported stronger-than-expected fiscal second-quarter results and increased its outlook for the year ahead.

The firm maintained its Overweight rating on CrowdStrike shares, according to market research reported after the company’s earnings release. The revised target represents roughly 9% upside from CrowdStrike’s latest reported share price of $218.40.

Morgan Stanley analyst Keith Weiss said the results helped ease concerns about whether the heightened threat environment was translating into stronger customer demand. The firm pointed to growth in endpoint detection and response, exposure management and identity protection-related products as evidence of increasing customer reliance on CrowdStrike’s platform.

CrowdStrike reported its results on August 26 for the quarter ended July 31. The company said revenue reached $1.47 billion, while ending annual recurring revenue rose to $5.84 billion. Net new annual recurring revenue totaled $333 million, a company record and a 51% increase from the same period a year earlier.

The company also raised its fiscal 2027 net new ARR growth outlook by 630 basis points to a midpoint of 34% year over year. Management said ARR from customers using its Falcon Flex consumption and subscription offering exceeded $2.29 billion, up 101% from a year earlier.

CrowdStrike generated $530 million in operating cash flow and $377 million in free cash flow during the quarter. It also reported $5.3 million in GAAP net income, compared with a $70.2 million GAAP loss in the year-ago quarter.

The results are significant because CrowdStrike is attempting to expand beyond its core endpoint-security business while sustaining rapid growth in a competitive cybersecurity market. Its broader platform includes security and IT operations, cloud security, identity protection, data protection, threat intelligence and observability products.

A key issue for investors is whether customers will continue consolidating security purchases with CrowdStrike rather than buying separate products from multiple vendors. The company’s Falcon Flex model is central to that strategy because it allows customers to commit to a broader portfolio and use products as their needs change. The sharp increase in Falcon Flex-related ARR suggests the offering is becoming an important part of CrowdStrike’s expansion strategy, although the company must still convert that adoption into durable revenue and profitability.

The stock’s market reaction has also reflected elevated expectations. The latest available market data showed CrowdStrike trading below Morgan Stanley’s new target, but a price target is an analyst estimate rather than a guarantee of future performance. Investors will continue to weigh the company’s growth against valuation, competition and the execution risks involved in selling more products to existing customers.

Morgan Stanley’s revision followed a broader wave of analyst target increases after the earnings report. Several firms raised their targets while maintaining positive ratings, indicating that the results changed expectations for CrowdStrike’s near-term growth. Those revisions do not eliminate risks, but they show that the company’s higher guidance and record new business strengthened the bullish case among some analysts.

CrowdStrike’s next major investor event is scheduled for September 2, when the company plans to hold an investor briefing at its Fal.Con conference. That event could provide additional detail on product adoption, artificial-intelligence security demand and how management expects Falcon Flex to contribute to future growth.