Cybersecurity firm CrowdStrike Holdings (CRWD) is set to release its Q3 FY25 results on November 26. Over the past year, CrowdStrike’s shares have surged by 77%, driven by advancements in artificial intelligence (AI) and strong fundamentals. The company has integrated AI into its cybersecurity solutions, enhancing threat detection and response capabilities. Coming to Q3 FY25, Wall Street analysts expect the company to report earnings of $0.81 per share for Q3, down 1.2% year-over-year. On the contrary, analysts expect revenues to increase 25% year-over-year to $982.8 million in Q3.
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As we approach Q3, it’s crucial to note that Delta Air Lines (DAL) has recently filed a lawsuit against CrowdStrike, citing the global IT outage on July 19. The airline seeks financial and punitive damages, along with legal expenses, from CrowdStrike. This legal action raises questions about its potential impact on CrowdStrike’s financial performance.
Analysts’ Positive Sentiment Ahead of CRWD’s Q3 Earnings
Despite the recent challenges, most Wall Street analysts have maintained their Buy ratings on the stock. On Friday, J.P. Morgan analyst Brian Essex reaffirmed his Buy rating and raised the price target to $369 from $330. He acknowledges the short-term effects of the July outage but emphasizes CrowdStrike’s strong fundamentals, customer loyalty, and market confidence. Essex also points to the company’s innovative “Code to Cloud to SOC” platform as a key driver of future growth.
Similarly, Shrenik Kothari of Robert W. Baird maintained a Buy rating, highlighting CrowdStrike’s growth potential and improving customer sentiment. While noting possible short-term volatility, Kothari expects annual recurring revenue to recover by fiscal 2026, supported by strong profits and cash flow, reinforcing his positive outlook.
What Do Options Traders Anticipate?
Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. The expected earnings move is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement. If this sounds complicated, don’t worry, the Options tool does this for you.
Indeed, it currently says that options traders are expecting a 9.11% move in either direction.
Is CrowdStrike a Buy or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on CRWD stock based on 34 Buys, six Holds assigned in the past three months, as indicated by the graphic below. The average CRWD price target of $337.75 implies 9.27% downside potential from current levels.
