In a recent update on Thursday, cybersecurity firm CrowdStrike Holdings (NASDAQ:CRWD) announced an upward revision of its targets for both subscription gross margins and operating margins. The company's new target model for subscription gross margin is set between 82% and 85% of revenue, marking an increase of 400 basis points from its previous goal. Concurrently, the operating margin target has been adjusted to fall within the range of 28% to 32%, reflecting a significant rise of 900 basis points. CrowdStrike expects to hit these targets within a span of three to five years.
The company's stock, however, experienced a minor dip of 1.1%, settling at $162.09 on Thursday, reversing gains observed during the premarket trading session.
Analysts at Truist Securities maintained their Buy rating on the stock and raised their price target from $175 to $200, citing the company's rapid pace of innovation and potential to capitalize on ongoing digital transformation trends, increased cloud adoption, and an escalating threat environment. The firm is transitioning from being solely an endpoint player to becoming a comprehensive platform provider catering to enterprise security needs.
Needham analysts also retained their Buy rating while increasing their price target from $200 to $215. They commended CrowdStrike's focus on pipeline development as a key performance indicator (KPI) and noted that the company significantly exceeded its pipeline build goals in a recent meeting, which they regard as a promising sign for future growth.
Guggenheim kept its Buy rating intact for CrowdStrike's stock and raised the price target from $175 to $191. Despite nearly half of the endpoints still utilizing legacy signature-based technology, analysts see substantial growth potential in the traditional endpoint market. They also noted that CrowdStrike has successfully redefined and broadened this market, making it virtually unrecognizable compared to its state a decade ago.
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