CrowdStrike (CRWD) is faced with high expectations heading into Q2 results and annual Fal.Con conference, BofA Securities said in a Tuesday note. The Q2 results are due Aug. 26.
Investors may need a meaningful net new annual recurring revenue beat to justify elevated expectations after a 19% rally in the shares post Q1, the report said. The metric is forecast to rise 29.3% from a year ago, roughly in-line with consensus.
"Following last quarter's negative stock reaction to a 2-3% topline beat, we believe investors may need to see a +3% beat to 2Q/FY nnARR consensus, at these levels," the note said.
The note said Flex traction, AI Detection And Response adoption, and module expansion remain key parts of the narrative.
"The numbers will serve as evidence of whether platform consolidation remains intact, and AI threats are steering buyers to the leading platforms," the report said.
BofA kept its neutral rating, saying that increasing demand for cyber security on AI tailwinds is balanced by a lofty valuation.
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