CrowdStrike  (CRWD)  beat Wall Street expectations in the second quarter, with CEO George Kurtz calling it “an exceptional Q2” as growth picked up sooner than expected. 

But Wall Street analysts think differently.

The cybersecurity provider posted adjusted earnings of 93 cents per share, topping the consensus of 83 cents. Revenue reached $1.17 billion and beat analysts’ forecast of $1.15 billion.

Still, margins slipped and guidance disappointed. Non-GAAP operating margin fell to 21.8% from 23.5% last year, and third-quarter revenue was projected between $1.21 billion and $1.22 billion, below analysts’ $1.23 billion estimate.

Shares dropped nearly 8% in postmarket trading after the report on Aug. 27, then rebounded 4.6% the next day.

CrowdStrike outage fallout lingers

More than a year ago, CrowdStrike’s faulty software update crippled airlines, banks, and hospitals for hours. The incident drove CrowdStrike shares down about 40% in just two weeks last summer.

The company is still dealing with the fallout from that event. “We expect to make third-quarter cash payments of approximately $51 million in connection with outage-related costs,” said Chief Financial Officer Burt Podbere during the earnings call.

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To keep customers from defecting, CrowdStrike has offered service credits and discounts that are now dragging on its top line.

The company said the incentive program will have a $10 million to $15 million revenue impact per quarter for the rest of the fiscal year.

Despite that incident, CrowdStrike stock has shown strong performance. It gained 34% last year and is up 28.5% so far in 2025, outpacing the S&P 500.

Several analysts have lowered their stock price targets for CrowdStrike after the earnings call.

Analysts cautious on CrowdStrike stock in the near-term

Piper Sandler lowered its price target on CrowdStrike to $450 from $505 while keeping a neutral rating, thefly.com reported.

The firm noted that net new annual recurring revenue (NNARR) returned to positive growth as the company began to lap the negative impacts from last year’s outage. Still, subscription revenue came in roughly in line for the second straight quarter, bringing in near-term drag.

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Piper Sandler also points to CrowdStrike management’s guided 40% NNARR growth in the second half of the year, a figure that topped Street expectations and could support the bull case.

However, Piper said the weak revenue guidance suggested the recovery isn’t strong enough to drive sustained upside.

CrowdStrike’s growth potential is underestimated, WedBush says

WedBush analysts led by Daniel Ives have lowered their stock price target for CrowdStrike to $525 from $575 to reflect a reduced multiple, reiterating an outperform rating.

Still, the analyst is bullish in the longer run.

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Ives said CrowdStrike “remains the gold standard in the cybersecurity space,” adding that the company is still in the early stages of a multi-year growth story as it moves to integrate AI across its platform.

“We continue to believe that the Street is underestimating the growth potential for CRWD as a second/third derivative beneficiary of the AI Revolution,” the analyst wrote.

CrowdStrike closed at $442.07 on Aug. 28.

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