CrowdStrike Holdings, Inc.

(NASDAQ Global Select)
Back to all articles
Bullish +65

What Changed For CrowdStrike Stock, And What Did Not?

Company update Earnings report Financial outlook AI-generated analysis

πŸ“ˆ CrowdStrike shares more than doubled over twelve months, rising from roughly $10,000 to $21,300 for a standard holding despite an early April dip of 16%.

πŸ’° The company added $333 million in net new annual recurring revenue in fiscal Q2 2027, a 51% increase year-over-year driven by AI security demand.

πŸš€ Management forecasts adding $343 million to $347 million in new recurring revenue for fiscal Q3 2027, representing 29% to 31% growth.

πŸ’Ό Total sales grew 24.3% year-over-year to $5.4 billion over the latest twelve months as customers migrated to higher-value subscription models.

πŸ“‰ CrowdStrike continues to report an operating loss of 2.2% of sales, narrowing from 8.3% a year ago but remaining below zero profitability.

🏦 The company trades at 50.3 times sales, significantly higher than the S&P 500's 3.0x multiple, reflecting high growth expectations.

πŸ€– Management explicitly links rising demand to AI, stating that cyber attacks and spending are increasing because of artificial intelligence adoption.

πŸ“Š Gross margin remained stable at 75% over the latest twelve months, up slightly from 74% a year ago.

⚠️ The upcoming fiscal Q3 2027 results will be watched closely to see if new recurring revenue meets forecasts and if operating margins turn positive.

Bullish Signals
  • CrowdStrike added $333 million of net new annual recurring revenue in fiscal Q2 2027, a 51% increase year-over-year that demonstrates accelerating subscription growth.
  • Total sales grew 24.3% year-over-year to $5.4 billion over the latest twelve months, driven by customers migrating to higher-value Falcon Flex subscriptions.
  • Management forecasts adding between $343 million and $347 million in new recurring revenue for fiscal Q3 2027, indicating continued strong demand for AI security solutions.
  • The company successfully pivoted market sentiment from April fears about AI to August confidence that AI is driving both cyber attacks and spending.
  • Gross margin remained resilient at 75% over the latest twelve months, maintaining pricing power despite rapid revenue expansion.
Risk Factors
  • CrowdStrike continues to report an operating loss of 2.2% of sales over the latest twelve months, meaning the company is still burning cash despite high growth.
  • The stock trades at a premium valuation of 50.3 times sales, which assumes continued high growth and leaves little room for error if performance slows.
  • Operating expenses exceed revenue by 2.2% of sales, indicating that the company has not yet achieved profitability despite adding significant new recurring revenue.
Full Analysis
Over a twelve-month period ending October 1, 2026, CrowdStrike (CRWD) shares more than doubled in value, rising from approximately $10,000 to $21,300 for a $10,000 holding. This significant outperformance occurred despite a temporary dip of roughly 16% in early April 2026 driven by market fears regarding artificial intelligence. The stock's trajectory reflects a broader trend in the cybersecurity sector, with peers like Palo Alto Networks also seeing substantial gains as investors priced in rising cyber spending. Following the initial AI-related concerns, CrowdStrike reported robust growth in its fiscal Q2 2027 results released on August 26, 2026. The company added $333 million in net new annual recurring revenue (ARR), representing a 51% increase year-over-year. Management attributed this surge to growing demand for AI security solutions, noting that both cyber attacks and overall spending are increasing due to the adoption of artificial intelligence technologies. Looking ahead, CrowdStrike forecasts adding between $343 million and $347 million in new recurring revenue for fiscal Q3 2027. While this represents a continued expansion, the growth rate is expected to moderate from the previous quarter's 51% to between 29% and 31%. The company maintains that subscription revenue, which accounts for 95% of total sales, will continue to drive top-line growth as customers migrate to higher-value subscription models like Falcon Flex. Despite strong revenue expansion, CrowdStrike continues to operate at a loss, with operating expenses exceeding revenue by 2.2% over the latest twelve months, down from 8.3% a year prior. The company trades at a premium valuation of 50.3 times sales compared to the S&P 500's 3.0x multiple, reflecting investor confidence in its high growth potential. However, analysts note that the current operating margin remains below zero, and the upcoming fiscal Q3 2027 results will be critical in determining if the company can reach profitability or at least narrow the gap further.