Since the IT outage caused by CrowdStrike (NASDAQ:CRWD) on July 19, investors and analysts have been debating its potential impact on the company’s financial model.
Analysts at Mizuho estimate that the CRWD’s annual recurring revenue (ARR) for fiscal 2025 (FY25) could be reduced by over $180 million (4.2% of the total), and by roughly $270 million (5% of the total) for FY26.
Their base case assumes that CrowdStrike will approach normalization of this issue by the second quarter of fiscal 2026, though some residual effects are expected in the second half of that year.
As a result, Mizuho has lowered its price target for CrowdStrike stock to $300 from $370, reflecting increased near-to-medium-term uncertainty and the likelihood of slower ARR growth during this period.
"Still, we note that our new PT represents 29% upside to current levels,” analysts noted. “We see an opportunity for a series of post quarter-end channel checks in early-to-mid August."
Mizuho said its channel checks through mid-July indicated strong performance for CrowdStrike's business. However, the company faced significant negative press in the last two weeks of the quarter. Limited checks conducted in late July showed a moderate impact on business momentum.
"That said, the last several days of the quarter could potentially tell a very different story, and to that point, a series of post quarter-end channel checks in early-to-mid August may cast some light,” analysts continued.
CrowdStrike’s shares plummeted more than 30% since the outage.
Meanwhile, Delta Air Lines (NYSE:DAL), the most adversely impacted company by the outage, has recently hired renowned attorney David Boies to seek damages from CrowdStrike and Microsoft (NASDAQ:MSFT).
The move comes as the outage caused millions of computer crashes and led to thousands of Delta flight cancellations.