CrowdStrike's (CRWD) fiscal 2027 net new annual recurring revenue growth target of over 20% year-on-year, compared to consensus of 14% to 15%, implied roughly 22% growth in ending ARR which was above investor expectations of 20%, Morgan Stanley said in a Thursday note.

Eyeing the company's investor briefing "positively," Morgan Stanley said it was encouraged by the company's targets and the extensive potential in its total addressable market as CrowdStrike continues to expand its platform.

Morgan Stanley also saw potential in the company's "security for artificial intelligence" offering, noting management's comments about how CrowdStrike's recent acquisition of Pangea, which offers AI threat detection, would contribute here.

Morgan Stanley said the company reiterated its guidance for operating margin guidance for 24%+ in fiscal 2027, as well as free cash flow margin of 27%+ exiting fiscal Q4 2026 and 30%+ for 2027, with management expecting Falcon Flex will likely become CrowdStrike's predominant contract structure and business model the near or medium term.

The firm rated CrowdStrike's as equal weight but raised its price target on the company to $475 from $460.

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