CrowdStrike strikes back as one of top software ideas in 2025: RBC
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CrowdStrike (NASDAQ:CRWD) was named one of the top ideas for North American software in 2025, according to an in-depth report by RBC Capital.
After CrowdStrike’s share price plunged in mid-July following a widespread outage, the cybersecurity firm reevaluated some procedures, made some apologies, and staged a late summer rally that has continued into the fall. Shares have surged about 35% since early August.
“While CrowdStrike’s recent outage dominated headlines and creates short-term noise, we believe the company will emerge from the outage as a stronger consolidation company, as we think FY/25 and FY/26 estimates are derisked while the path to $10B in ARR is achievable,” said RBC analyst Matthew Hedberg.
CrowdStrike was one of 11 software names RBC considers a top idea going into 2025.
“The key consideration was to identify ideas where we are comfortable that we won’t get a 2025 estimate reduction, as well as having a catalyst path for upward estimate revisions against what is generally a consensus deceleration for CY/25 estimates,” RBC noted.
RBC also considers Adobe (NASDAQ:ADBE), Constellation Software (TSX:CSU:CA) and Veeva Systems (NYSE:VEEV) as top large cap software ideas.
“Consensus revenue growth estimates for CY/24 and CY/25 are +10.5% and +10.9%, respectively, while consensus expects digital media ARR growth to be 12.9% and 11.3%,” said RBC analyst Matthew Swanson about Adobe. “We believe both these sets of growth rates could be conservative as the GenAI benefit starts to solidify.”
Top mid-cap ideas
The top mid-cap North American software ideas for 2025 include The Descartes Systems Group (NASDAQ:DSGX), GitLab (NASDAQ:GTLB) and Guidewire Software (NYSE:GWRE).
“We believe GitLab is well positioned to consolidate DevSecOps spending,” Hedberg said. “We are bullish on catalysts including the Premium price increase, Ultimate tier adoption, Duo adoption, GitLab Dedicated, and free-to-pay conversion.”
Top small-cap ideas
The three small-cap top ideas identified by RBC include Clearwater Analytics (NYSE:CWAN), Kinaxis (TSX:KXS:CA) and Varonis Systems (NASDAQ:VRNS).
“We believe Varonis is in the early stages of penetrating a large and growing data security/governance market that includes fragmented competition,” Hedberg said. “Through a SaaS-first model, we believe Varonis has the opportunity to generate strong financial growth in CY/25 and beyond.”