Where will CrowdStrike Holdings stock be in a year?

Actions of CrowdStrike Holdings (CRWD -0.81%) they have posted healthy gains of 56% over the past year. But a closer look at recent share price action makes it clear that the high-flying cyber security company’s momentum has come to a screeching halt, thanks to a botched software update that brought down many global IT systems on July 19.

Specifically, CrowdStrike stock is down 34% from the 52-week highs it hit in early July. However, the cybersecurity specialist has recently seen a comeback. Its fiscal second-quarter 2025 results (for the three months ended July 31) appear to have eased investor concerns about the fallout from the disruption.

Does this mean investors should consider buying CrowdStrike stock now after its recent pullback in anticipation of further gains next year? Let’s find out.

Wall Street appears bullish on CrowdStrike stock

Of the 51 analysts covering CrowdStrike stock, 82% rate it a buy, while only 2% rate it a sell. It’s also worth noting that the stock has a 12-month average price target of $315, indicating a 21% upside to its stock from current levels. The $540 price target suggests CrowdStrike could rise 108% from current levels.

Analysts’ upbeat outlook, despite the global IT outage a few months ago — which cost Fortune 500 companies a massive $5.4 billion, according to cloud monitoring and assurance provider Parametrix — comes from the company’s modest reduction in guidance. CrowdStrike cut its fiscal 2025 revenue guidance to a range of $3.89 billion to $3.9 billion, down from a previous range of $3.98 billion to $4.01 billion. That translates into a 2.5% discount in the middle.

The updated guidance means CrowdStrike’s top line is on track to grow 27.5% in the current fiscal year. Management pointed out on its most recent earnings conference call that compensation packages to offset the outage will hit its subscription revenue by $60 million this fiscal year, while professional services revenue could be hit in the “million single-digit dollars in the back half of fiscal ’25.”

CrowdStrike’s compensation packages include giving clients access to additional cyber security modules, flexible payment terms, and extending the duration of clients’ subscription contracts. These packages will have a negative effect on the profitability of the company. That explains why CrowdStrike lowered its fiscal 2025 earnings per share guidance to $3.63 per share from the previous figure of $3.98 per share.

CrowdStrike says its operating margins will begin to improve in the second half of fiscal 2026 after the short-term effect of the disruption on its business. At the same time, management points out that “its agreements with customers contain provisions that limit our liability, and we maintain insurance policies designed to mitigate the potential impact of certain claims and to have a strong cash position.”

Updated earnings guidance means CrowdStrike’s bottom line is expected to grow 17% this fiscal year. It’s worth noting that the company’s consensus earnings expectations for the next two years have also fallen. But the bright side is that its underlying growth is expected to accelerate after a few fiscal years.

CRWD EPS estimates for current fiscal year data by YCharts.

Can investors expect the stock to maintain its recent momentum and head higher?

While Wall Street’s price targets indicate that CrowdStrike could indeed grow in the coming year, it won’t be surprising to see the stock remain under pressure in the near term as the company recovers from the effects of the July 19 outage. However, any further pullback in CrowdStrike stock could open up a buying opportunity for investors due to its robust revenue pipeline and huge end-market opportunity.

CrowdStrike estimates that its total addressable market (TAM) in 2024 could reach $100 billion, before growing to $225 billion in 2028. The company has done well to capitalize on this lucrative opportunity so far, which is evident from 50% of last year. annualized increase in remaining performance obligations (RPO) last quarter to $4.9 billion. RPO refers to the total value of a company’s future contracts yet to be fulfilled.

So, the healthy year-over-year growth in RPO points to a bright future for the company, suggesting that it could sustain its healthy levels of revenue growth over the long term. Also, if the company’s results and guidance turn out to be better than expected in the coming quarters, it may be able to regain investor confidence and even deliver the consistent earnings that analysts expect from it in the coming year.

As such, savvy investors may consider accumulating this cybersecurity stock if it corrects further in the near term and becomes available at a more attractive valuation. Its prospects for the year ahead and in the long term look bright.