CrowdStrike stock jumps on key analyst upgrade: Time to buy?

Key points

• CrowdStrike stock has been surging in recent days.

• A major catalyst was an upgrade and price target raise by a leading Wall Street analyst.

• Is CrowdStrike stock a buy?

The Wall Street analyst upgraded the stock to buy and raised the price target for CrowdStrike.

CrowdStrike (NASDAQ: CRWD) stock has been surging as of late, up about 8% this week to roughly $386 per share.

The leading enterprise cybersecurity firm had soared as high as $392 per share on Tuesday before falling back a bit. But the AI stock was still up about 4% as of Tuesday afternoon.

The most recent catalyst for CrowdStrike was a vote of confidence from a leading Wall Street firm, BTIG, which upgraded CrowdStrike stock and boosted its price target.

BTIG analyst Gray Powell issued a buy rating for CrowdStrike, upgrading it from neutral, and set a $431 per share price target. That’s about 11% higher than the current stock price. Should investors heed BTIG’s recommendation?

Turning the page on the summer outage

CrowdStrike has seen strong revenue growth, although it slowed in 2024 compared to the previous year. Still, the firm experienced a 29% increase in revenue last year, including a 25% increase in Q4. Further, its annual recurring revenue grew 23% year-over-year to $4.24 billion – with $224.3 million of net new ARR added in the quarter.

However, it had a $92 million net loss in Q4, compared to net income of $54 million in the fourth quarter of the previous year. And for the full fiscal year, CrowdStrike had a net loss of $19 million, compared to net income of $89 million the previous fiscal year.

CrowdStrike is still feeling the effects from the CrowdStrike outage that occurred last summer, which temporarily crashed Microsoft Windows and disrupted a range of businesses. Not only was it a PR setback for CrowdStrike, it delayed some deals that the company had in the works.

However, Powell believes the impact from the outage is now behind CrowdStrike.

The “IT outage [is] now eight months in the rearview mirror,” Powell wrote in a research note, reported Barron’s. “And our checks the last few months lead us to believe that partners and customers have largely moved on from it.”

He also calls CrowdStrike the “cleanest platform play across the security software space.” Further, Powell said the company has “demonstrated its dominance in the core endpoint security target market,” reporting Investing.com.

Is CrowdStrike stock a buy?

For these reasons, and others, Powell believes that CrowdStrike has more long-term earnings power than most of his counterparts.

The company is calling for Q1 2026 revenue of $1.100 billion to $1.106 billion, which is in line with Q4. Note, this is CrowdStrike’s 2026 fiscal year. But the full year revenue target of $4.743 billion to $4.805 billion for fiscal 2026 is 20% higher than the last fiscal year at the low end.

Looking out to fiscal 2027, Powell expects the company to generate $6.225 billion to $6.579 billion in ARR, which would be higher than the consensus estimate of $6.116 billion. BTIG’s see 2.5% to 8% ARR growth in fiscal 2027, but Powell contends it is more likely to come in at the high end of that range.

BTIG’s price target is a little higher than the median price target of $420, which would suggest 8% growth. I’d be more inclined to side with the median, as CrowdStrike is still forecasting lower adjusted net income for Q1 and the full fiscal year. Plus, its P/E is sky-high at 401, with a forward P/E of 108.  

CrowdStrike stock is up 12.5% YTD, but at this valuation, and coming off a year of net losses, with lukewarm guidance, I’d be in wait-and-see mode.