Packaged Software · #45 in the Retail 100

CrowdStrike Holdings

CRWD

Our rating: hold
12-month target: $293.95 +21.6%
Expected vs. S&P 500: +3.1 ptsSee the math
Next earnings: Dec 1In 26 daysEarnings calls page ↗

CrowdStrike's rally rests on a 51% jump in new recurring revenue, the same measure federal regulators are questioning on some of its past deals.

Summary

CrowdStrike sells cybersecurity software that protects companies' computers, cloud servers and logins through one program. Two years after its faulty update crashed millions of Windows computers, its growth is speeding up, and management credits fear of AI-powered attacks. The stock has more than doubled in a year. It now depends on that burst of demand lasting into next year, because the price assumes years of fast growth.

$244.61

+$106.63 (+77.28%)Past year

What CrowdStrike Holdings does

CrowdStrike sells cybersecurity by subscription. One small program on each computer and server feeds its cloud platform, so customers can add more of its 33 security modules without installing anything new.^3,31

What it sells

Falcon platform subscriptions95% of revenue, Q2 FY2027
Protection for computers, cloud servers and logins, plus security log tools and a managed service that watches systems around the clock.
Incident response services5% of revenue, Q2 FY2027
Experts who investigate and clean up breaches. Small, but often the first contact that leads a company to buy the platform.

Who buys it

Companies of every size, from large enterprises to small firms that start with a free trial, plus government agencies. Most sales go through partners such as resellers and outsourced security teams. The U.S. was 67% of FY2026 revenue.

Where you've seen it

The Windows computers that crashed on July 19, 2024 had received a faulty CrowdStrike software update.

The backstory

On July 19, 2024, a faulty CrowdStrike update crashed 8.5 million Windows computers, disrupting airlines, banks and hospitals. Founder and CEO George Kurtz cut the forecast and gave customers about $60M in discounts and extra services to keep them. A year later, recurring revenue was still up 20%. The opportunity now is AI, because models that find software flaws faster are pushing companies to buy more protection.

How the business makes money

Why each extra CrowdStrike module is mostly profit^{1,3,7,10,12,13,27}

Step 1
Fear of AI-powered attacks is pushing companies to buy more protection. New subscription revenue that renews each year grew 51% last quarter.
Step 2
One small program on each computer lets customers add any of 33 security modules without installing anything new. Over half use six or more.
Step 3
Each added module costs little to deliver. CrowdStrike keeps about 81¢ of each $1 of subscription sales after the cost of running them, before stock pay.
Step 4
Customers usually pay when contracts start, so cash arrives early. Management aims to keep 34¢ to 38¢ of each $1 of sales as spare cash by fiscal 2029.
What shareholders get
The stock is a bet on growth: it costs about $180 for each $1 of expected yearly earnings, so years of fast growth have to come.

Advantages

One program, many products

Major advantage

CrowdStrike's biggest advantage. Customers add products without installing new software, and over half of subscription customers now use six or more modules.^1,2

Flexible Falcon Flex contracts

Strong advantage

A strong driver of bigger deals. Flex accounts carry $2.29B of recurring revenue, double a year ago. Customers first expand about eight months in, on average.^1,27

Newer products growing fast

Strong advantage

A strong source of new growth. Next-Gen SIEM, its security-log product, has about $695M of recurring revenue. It is growing about 60% a year, and next-generation identity about a third.^7,27

What's changing

AI went from threat to sales driver

AI went from a threat to CrowdStrike to a reason to buy it. In February, Anthropic's launch of Claude Code Security knocked the stock down about 18% over two days on fears AI could replace security tools. Two months later Anthropic made CrowdStrike a launch partner for Project Glasswing, with early access to its Mythos model. Kurtz says that model convinced customers AI needs security.^{1,6,7,14,15,25,28}

Competitors

Who else an investor would consider, and how they compare.

Company	Market value	What it does	Compared with CrowdStrike
CrowdStrikethis stock	$250.46B	CrowdStrike sells cybersecurity by subscription. One small program on each computer and server feeds its cloud platform, so customers can add more of its 33 security modules without installing anything new.
Palo Alto NetworksPANW	$319.46B	Sells a broad security suite, from firewalls to cloud, now adding identity via CyberArk.	Palo Alto is bigger and broader; its stock is half as pricey on earnings.^8,9,17
Microsoft (Defender)MSFT	$3.96T	Bundles Defender security into the Windows and Microsoft 365 licenses businesses already buy.	Microsoft wins on bundled price; CrowdStrike wins firms that mix many security vendors.
ZscalerZS	$42.46B	Secures how employees reach apps and the internet, routing traffic through its cloud.	Zscaler guards network traffic; CrowdStrike guards devices, and grows faster.¹⁹
SentinelOneS	$8.88B	A smaller rival selling AI-driven protection for computers and servers.	Same market, but CrowdStrike is nearly five times larger and growing faster.¹⁸

Leadership

Who runs the company, and how the stock has done under the CEO.

CRWD +257.4%S&P 500 +61.8%Price change since Nov 2021, the earliest data available · log scale

20222023202420252026

George KurtzFounder, CEO and Founder15 yrs, since 2011

Burt PodbereCFO11 yrs, since 2015

Michael SentonasPresident3.6 yrs

Wall Street on Kurtz: PositiveJefferies raised its price target after CrowdStrike added a record $333M of new yearly subscription revenue, helped by Falcon Flex, a plan that lets customers add more of its products. Bernstein rates it a Hold and warns growth could slow below 25%.^L6,L7,L3

Leadership sources (7) · researched Oct 2026

L1George Kurtz: CEO & Founder · CrowdStrike, 2026-10-08
L2Who is the CEO of CrowdStrike in 2026? George Kurtz · Unify, 2026-10-08
L3CrowdStrike Reports Second Quarter Fiscal Year 2027 Financial Results · CrowdStrike, 2026-08-26
L4Burt Podbere: Chief Financial Officer · CrowdStrike, 2026-10-08
L5Michael Sentonas: President · CrowdStrike, 2026-10-08
L6CrowdStrike shares surge after Q2 beat and stronger fiscal 2027 outlook · Yahoo Finance, 2026-08-27
L7Why CrowdStrike (CRWD) and Palo Alto (PANW) Stocks Are Rising Today · TipRanks, 2026-06-29

Bull vs. bear: two bets on the same stock

1
A share is a small slice of the company. Its value comes from the profits the company will make in the future.
2
Nobody knows those profits yet. Buyers (bulls) pay today's price betting they'll beat what most people expect. Sellers (bears) bet they'll fall short.
3
When results come in, the price moves toward whichever side was right, and that side makes money.

The question they disagree on

Will CrowdStrike add at least $1.63B of new annual recurring revenue in fiscal 2028, the 20% growth it targets, and justify a price near 180 times expected earnings?^{1,3,4,7,9,21,25,27,32,33}

Bull case: why buyers buy

If AI-driven attacks keep customers buying more of its software, new recurring revenue grows well above 20% and earnings grow fast enough to support the price.

Demand beat even management's own forecast. New recurring revenue came in about $47M above the top of the range implied in June.
Management keeps raising its outlook. It has lifted its fiscal 2027 growth forecast for new recurring revenue twice, now to 34%.
Flex contracts lead customers to buy more. Customers who expanded a Flex contract last quarter added 25% more on average.
The long-term goal moved closer. At its September briefing, management pulled its $10B recurring revenue goal forward by a year.

Bear case: why sellers sell

If the burst of AI-driven spending fades and growth slows back toward 20%, a stock at about 180 times earnings has far to fall.

Growth is set to slow sharply. This quarter's forecast implies new recurring revenue growth of 29% to 31%.
The stock already prices in a lot. It trades at about 52 times its past year's sales and above the average analyst price target.
Stock pay hides real costs. It reached 27% of revenue last quarter, and under standard accounting CrowdStrike still lost money on operations.
AI labs could take the profit. Security vendors like Proofpoint now pay OpenAI for its security models; if those models do the detection, the labs keep the margin.

Where Delphi landsholdWe think today's price already weighs both sides fairly.See why

What to watch

The numbers that will settle the debate.

New annual recurring revenue▲ improving

$333M last quarter, up 51%; $343M to $347M expected this quarter^1,7,27,30

The key number: management targets at least $1.63B in fiscal 2028, 20% growth.

Total annual recurring revenue growth▲ improving

$5.84B, up 25%, from 24% growth two quarters earlier^1,2

Shows whether the whole subscription base, not just new sales, is speeding up.

Free cash flow margin▲ improving

26% last quarter, or $377M^1,7

Earnings are small, so free cash flow as a share of revenue better shows what growth is worth.

Next earnings report

Dec 1

In 26 days

Earnings calls page ↗

Expected earnings per share: $0.31
Expected revenue: —

What to listen for: Whether new recurring revenue beats the $343M to $347M forecast, and whether management repeats its 20% growth target for fiscal 2028. Its formal fiscal 2028 forecast usually comes in March.^1,20,23,29

What would prove this wrong

✕Growth in new recurring revenue falls below 20% in fiscal 2028.
✕Flex customers renew without raising their spending.
✕AI companies' own security tools replace paid CrowdStrike modules.
✕The Justice Department or SEC review forces restated recurring revenue figures.

Our ratingHoldas of Nov 2 close, $241.81 · what ratings mean

AI security demand is speeding up growth, but at about 180 times expected earnings the price already reflects it, so expected gains only slightly beat the S&P 500.

12-month target: $293.95 (+21.6%)
S&P 500, same method, with dividends: +18.5%
Expected vs the market: +3.1 points

The math behind the recommendation

Three 12-month price scenarios, weighted by probability, compared with the S&P 500 under the same method.

Now $241.81

Target $293.95

bull case30% likely

$387.52 +60%

AI-driven demand keeps new recurring revenue growing well above the 20% target, and fiscal 2028 earnings beat forecasts.

$2.17 earnings per share × 179 = $387.52

base case50% likely

$267.52 +11%

New recurring revenue grows about 20% in fiscal 2028, as targeted, and earnings match forecasts.

$1.91 earnings per share × 140.1 = $267.52

bear case20% likely

$219.68 -9%

The AI spending burst fades, new recurring revenue grows less than 20%, and fiscal 2028 earnings fall toward the $1.50 low estimate.

$1.85 earnings per share × 119.1 = $219.68

Why these odds: CrowdStrike beat earnings forecasts four straight quarters and raised its outlook twice, and 48 of 49 changes to this year's estimate in the past 30 days were upward.

How the prices are built: Wall Street expects earnings per share of $1.91 for the year starting a year from now (analysts range from $1.78 to $2.42). Today the stock trades at 162.3 times next year's earnings per share; its five-year middle is 97.3. Because earnings per share is forecast to grow fast, valuations are cut 4%, since fast growth rarely keeps its price.^{1,20,21,22,23,24,25}

What tests the call: Fiscal Q3 2027 earnings (date expected, not confirmed) (Dec 1)

Buy means expected to beat the S&P 500 by 10+ points over 12 months; Sell means expected to trail it by 10+. Inputs gathered Oct 5; the recommendation updates with the price every day. Model-generated, not personalized investment advice. How ratings work · Track record

What the price assumes

At $241.81, investors pay about 8.7 times what they pay for the average stock's earnings

CrowdStrike Holdings trades at 162 times the earnings analysts expect over the next 12 months. That ratio is the multiple: what investors pay today for each dollar of a year's earnings. That is pricier than it has been 80% of the time over the past five years, when the middle was 97.

Analysts expect earnings to grow about 28% the year after, against about 16% for the S&P 500. The S&P 500 trades at 19 times. To be priced like the average stock, CrowdStrike Holdings would need to earn about 8.7 times what analysts expect over the next 12 months. The price is a bet on profits well beyond that.

CrowdStrike Holdings multiple: 162×
S&P 500 multiple: 19×
Base case: +11%
Bear case: −9%

The skewOur bear case loses about 86¢ for every $1 our base case makes. That ratio, how much you stand to lose against how much you stand to make, is the skew.

Last earnings

FQ2 2027 results, reported Aug 26

Record $333M of new recurring revenue, up 51%, and a second straight raise to the full-year outlook.^1,4,5,6,25

Reported Aug 26	Expected	Actual	Difference
Earnings per share	$0.24	$0.31	+29.2%
Revenue	—	—	—

Beat expectations in 6 of the last 6 quarters

Stock reaction: Up about 11% after hours; closed up about 20% the next day, its best day ever

Why the stock moved

Up: new recurring revenue of $333M beat the top of the range implied by June guidance by about $47M.
Up: management raised fiscal 2027 growth in new recurring revenue by 6.3 percentage points, to 34%.
Up: Kurtz credited the Mythos model's release with convincing customers that adopting AI requires more security.
Up: cyber stocks rallied; Okta, which also beat forecasts, rose nearly 29%; Palo Alto and Zscaler gained 10% or more.

What it means for the stock: Strengthened it. Growth is accelerating instead of fading after the outage, but the rally moved the debate to whether that speed lasts into fiscal 2028.