CrowdStrike Holdings' (CRWD) fiscal Q1 results delivered a strong start to the year as the company boosted guidance for annual recurring revenue after a quarterly beat, supported by AI momentum, RBC Capital Markets said Thursday in a report.
The ARR result still fell short of the market's elevated expectations, tied to optimism around the company's Mythos and Glasswing initiatives, the report said. Management raised its full-year ARR outlook by far more than the size of the quarterly beat, reflecting growing confidence in AI-driven demand and the sales pipeline, RBC said.
"Despite the run in shares, we still favor the name as a cybersecurity consolidator with tangible AI tailwinds and accelerating growth/improving profitability on estimates we believe are still biased upward," the report said.
Management described Mythos, the company's new AI-native architecture, as an inflection point. While it did not materially affect Q1 results, it contributed to a record Q2 pipeline and supported the full-year guidance increase, RBC said.
AI tailwinds remain strong, with AI-driven detection and response more than tripling from the previous quarter and the Q2 pipeline exceeding $50 million, the report said.
RBC raised its price target on CrowdStrike stock to $755 from $650 and maintained its outperform rating.
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