CrowdStrike dips despite strong Q1, outlook, as investors worry over ARR growth
Sundry Photography/iStock Editorial via Getty Images

CrowdStrike (NASDAQ:CRWD) shares dipped on Friday even as the cyber security firm posted a strong first-quarter and guidance, prompting analysts to note that investors may be worried about the "modest" beat in annual recurring revenue.
Citi analyst Fatima Boolani pointed out that investors appear "discontent" with the 1% beat in annual recurring revenue, or ARR, despite a tough comparison last year and a still impressive 61% year-over-year rise. However, a 32% rise in net new annual recurring revenue to $190.5M and an "anemic" 20 basis point rise in operating margins for the full-year is likely to pressure shares, but Boolani pointed out "this is hair-splitting and weâd be buyers on the weakness."
"Net, against the backdrop of distracted/consolidating legacy vendors, and underappreciated public sector upside in [second-half] both drafting off a demonstrably profitable growth engine, we see continued positive forecast revisions ahead, with [CrowdStrike's] scarce growth + profit at scale profile warranting a premium multiple," Boolani wrote in a note to clients.
CrowdStrike (CRWD) shares fell slightly more than 3% to $168.14 in premarket trading on Friday.
Morgan Stanley analyst Hamza Fodderwala, who rates CrowdStrike (CRWD) shares equal weight with a per-share price target of $195, also noted that the ARR was "modest" when compared to historical figures, but its ARR guidance for the second quarter was "much better," prompting analysts to raise their estimates.
CrowdStrike (CRWD) reported an adjusted $0.31 per share on $487.83M in revenue for the first quarter, compared to estimates of $0.23 and $464.35M. ARR improved 61% year-over-year to $1.92B, including $190.5M in net new ARR.
Looking ahead to the second quarter, CrowdStrike (CRWD) said it expects revenue to be between $512.7M and $516.8M, compared to estimates of $509.9M.
For the full-year, the company expects sales to be between $2.19B and $2.2B, compared to estimates of $2.15B. Adjusted earnings are forecast to be between $1.18 and $1.22 per share, compared to estimates of $1.10 per share. 
BTIG analyst Gray Powell lowered his per-share price target on CrowdStrike (CRWD) to $234 from $257 following the report, but noted that the results and guidance were strong and the long-term prospects bode well. 
"We remain highly confident in our forecasts for CRWD and think the combination of 50%+ revenue growth and 30% [free cash flow] margins make for a very compelling story in today's market," Powell wrote. 
In April, investment bank Goldman Sachs upgraded CrowdStrike (CRWD) and raised the price target on the stock, noting its fundamentals have continued to improve.