CrowdStrike's (CRWD) fiscal Q1 results and outlook showed strong execution, with the company seeing broad-based momentum and "clear step-ups" compared with last year, BofA Securities said in a note Thursday.

The investment firm highlighted that CrowdStrike's fiscal Q1 net new annual recurring revenue of $256 million was up 32% year on year from $194 million in Q1, supporting total annual recurring revenue of $5.51 billion, an increase of 24% year on year. Meanwhile, Q1 revenue rose 26% to $1.39 billion and margins also expanded meaningfully, the note said.

BofA said CrowdStrike's record Q2 pipeline, as well as strong retention of 97% gross and continued module adoption, support its guidance.

The brokerage also noted that the company's management highlighted incremental AI-driven security spend, which is a shift from the previous year's consolidation-led growth.

However, the key debate for CrowdStrike is now centered on sustainability, BofA said.

The dynamics of the company's Falcon Flex product have accelerated meaningfully, with faster reflex timing at roughly 7 months and higher expansion uplift, raising questions on demand durability into the back half versus more linear expansion last year.

BofA reiterated CrowdStrike's neutral rating and lifted the company's price target to $750 from $535.

Shares of CrowdStrike were down nearly 8% in Thursday trading.

Price: 689.08, Change: -58.53, Percent Change: -7.83