CrowdStrike (CRWD) is facing potential growth deceleration through 2027 as its growth drivers remain at an early stage, BofA Securities said in a Wednesday note.
The company's underlying business remains strong, as demonstrated by "healthy" Q1 results, with a 22% increase in annual recurring revenue, but BofA Securities said it expects CrowdStrike's annual growth to decelerate from 21% in 2025 to 18% in 2027.
"The question is whether CrowdStrike could find significant enough drivers to accelerate the growth from current levels," BofA Securities said. While the company's Flex initiative could drive deal sizes, it remains in early stages with only 820 customers currently, the investment firm added.
BofA Securities downgraded CrowdStrike to neutral from buy, with a higher price target of $470 from $420.
Shares of CrowdStrike were down nearly 4% in recent Wednesday trading.
Price: 469.38, Change: -19.38, Percent Change: -3.97