What Analysts Think of CrowdStrike Stock Ahead of Earnings

Key Takeaways

• CrowdStrike is set to report third-quarter results after markets close Tuesday, with analysts expecting rising revenue and adjusted profit.
• It will be CrowdStrike's first full quarter since a faulty July software update caused a global Microsoft Windows outage with wide-ranging impacts.
• Morgan Stanley analysts recently wrote that they believe the outage will have less of a negative impact on CrowdStrike's bookings than consensus estimates.

After markets close Tuesday, CrowdStrike (CRWD) is scheduled to report results for its fiscal 2025 third quarter, the cybersecurity company's first full period since its faulty July software update led to a global Microsoft (MSFT) Windows outage with wide-ranging impacts.

The cybersecurity company, which serves some of the biggest tech companies and their cloud computing platforms like Microsoft Azure, pushed an update in July that caused issues with Windows around the world.

Even though 25 of the 27 analysts tracked by Visible Alpha rate CrowdStrike as a "buy," with one "hold" and "sell" rating apiece, the stock's average target price is $336.85, roughly 7% below its level Monday afternoon. The stock has recovered the ground it lost in the days following the summer outage—including a 22% rally this month—but the average price target suggests analysts may be waiting for the company's report to adjust their outlook.

Analysts expect CrowdStrike to report $983.0 million in revenue for the third quarter, up from $786.0 million a year ago, with a profit of just $1.3 million, down from $26.7 million. After stripping out one-time expenses, CrowdStrike is projected to report adjusted net income of $203.5 million, up from $199.2 million.

First Full Quarter Since Outage

The report will detail CrowdStrike's first full quarter since the July outage, providing an initial look into what lasting impact the incident may have had on the company's customer base.

In a recent note, Morgan Stanley analysts said their research has shown CrowdStrike's bookings took a projected 15% year-over-year hit, better than the consensus 37% decline other analysts expect. The Morgan Stanley analysts said their research has indicated that many new deals have been paused rather than canceled, and said they haven't seen "material churn" in CrowdStrike's customer base as discounts and package deals have helped the company retain some momentum.

"The main difference in the competitive environment at this point is that CrowdStrike is no longer 'automatically' chosen by customers as the next endpoint security vendor of choice," the analysts wrote, noting that it remains an option, along with SentinelOne (S), Palo Alto Networks (PANW), and Microsoft itself.

The firm is also still in the midst of dueling lawsuits with Delta Air Lines (DAL), which suffered the biggest disruption to its operations of the major airlines following the outage. Delta has said the outage cost it at least $500 million as it canceled thousands of flights, while CrowdStrike said Delta's aging IT systems were more at fault than the update that caused the Windows outage.

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