CrowdStrike's Q1 Beat Wasn't Big Enough For Some Bulls — CRWD Stock Heads For Worst Drop In 22 Months

• Analysts at Jefferies noted that while CrowdStrike’s annual recurring revenue growth of $6 million exceeded the consensus estimates, the beat was not large enough.
• The firm lowered its price target on CrowdStrike to $760 from $775 while maintaining a ‘Buy’ rating.
• According to Jefferies, the smaller-than-usual ARR beat, combined with elevated investor expectations following the stock's 97% rally since April 10, weighed on shares after earnings.

Shares of CrowdStrike Holdings Inc. (CRWD) were on track for the worst single-day fall in 22 months in Thursday’s pre-market session after its first-quarter (Q1) results disappointed investors.

CrowdStrike reported earnings per share (EPS) of $1.1 on revenue of $1.39 billion, compared to Wall Street estimates of an EPS of $1.07 on revenue of $1.36 billion, according to Fiscal.ai data.

However, analysts at Jefferies noted that while CrowdStrike’s annual recurring revenue growth of $6 million beat the consensus estimates, the beat was not large enough, according to TheFly.

CrowdStrike shares were down more than 11% during Thursday’s pre-market trade. CRWD was among the top trending tickers on Stocktwits at the time of writing.

Why Is Wall Street Divided On CRWD?

Jefferies lowered its price target on CrowdStrike to $760 from $775 while maintaining a ‘Buy’ rating. The firm noted that annual recurring revenue (ARR) growth in Q1 accelerated to 24% year-over-year, marking a third consecutive quarter of faster growth. However, CrowdStrike's $6 million ARR beat versus consensus fell well short of the $15 million to $29 million upside delivered in each of the previous four quarters, the firm said.

According to Jefferies, the smaller-than-usual ARR beat, combined with elevated investor expectations following the stock's 97% rally since April 10, weighed on shares after earnings.

Barclays analyst Saket Kalia raised his price target on CrowdStrike to $675 from $650 while maintaining an ‘Overweight’ rating. Kalia noted that net new annual recurring revenue rose to $256 million but fell short of its upside scenario, as deals generated from the Mythos launch in April are expected to take longer to close.

The firm stated that investors appear to be pushing back on the size of CrowdStrike's Q1 beat.

Analysts at TD Cowen stated that investors were looking for a larger upside surprise after the stock surged roughly 40% over the past month. The firm raised its price target on CrowdStrike to $700 from $625, reiterated a ‘Buy’ rating, and added that the post-earnings sell-off should prove transitory.

Q1 Performance Indicator Of AI Inflection Point, Says CRWD CEO

CrowdStrike CEO George Kurtz stated that the company’s record net new ARR, QuiltWorks coalition, and AIDR innovation are indicators of its own AI inflection point.

“We're seeing platform adoption from existing customers, new logo lands, and increased partner engagement, each giving me the conviction to significantly raise our FY27 net new ARR guidance. The technology is here. The team is here. And the market opportunity is ours,” Kurtz said.

CrowdStrike expects second-quarter (Q2) EPS in the $1.16 to $1.17 range on revenue of $1.43 billion to $1.44 billion, compared to estimates of an EPS of $1.16 on revenue of $1.43 billion.

How Did Retail Traders React To CRWD?

Retail sentiment on Stocktwits around CrowdStrike trended in the ‘bearish’ territory at the time of writing.

One user believes the CrowdStrike selloff post-earnings is “fake.”

CRWD stock is up 59% year-to-date and 53% over the past 12 months. The S&P 500 ETF (SPY) is up 27% over the past 12 months, while the Invesco QQQ Trust ETF (QQQ) is up 41%.

The Vanguard S&P 500 ETF (VOO) and the iShares Core S&P 500 ETF (IVV) are up 27% during this period.

Also See: Bessent Says US Has 'Makings' Of One Of The Strongest Economies In History, Says 'Temporarily Elevated Prices' Will Come Down

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