Stock Analysis
CrowdStrike Holdings, Inc. (CRWD)
NASDAQ: CRWD · Cybersecurity Software
Updated
Rated Watchlist, with a fair value of $211 against a last close of $259.25 (-18.6% implied upside). A sector re-rating carried the shares 23% past a fair value that yields have since trimmed to $211; the business is excellent and the price is further from a Buy than it was.
- Verdict
- Watchlist
- Fair Value
- $211
- Investment Score
- 65/100prev 67
Investment Scorecard
Composite score 65/100 (previous 67). Every factor is scored out of 10, ten always being the best outcome, including for risk.
| Factor | Score | Weight | Change | Basis |
|---|---|---|---|---|
| Business Quality | 9/10 | 12% | unch. | Unchanged. Record net new ARR in the July quarter; nothing since alters it. |
| Financial Strength | 9/10 | 12% | unch. | Unchanged. About $4.2bn of net cash and positive free cash flow. |
| Competitive Advantage | 9/10 | 13% | unch. | Unchanged. Falcon Guardian drew favourable broker commentary; that is opinion, not displacement data. |
| Management | 9/10 | 8% | unch. | Unchanged. The CFO's $125m sale was made under a plan adopted in June and he retains a large holding. |
| Growth Potential | 9/10 | 15% | unch. | Unchanged. The fiscal 2028 ARR guide is untested until the December report. |
| Valuation | 1/10 | 25% | -1 | Lowered one to the floor. 44.3x guided fiscal 2027 revenue against 35.8x, and the price is 19% above weighted fair value. |
| Risk (10 = lowest risk) | 5/10 | 10% | unch. | Unchanged. The Justice Department closed its probe, which removes a tail; the ten-year's rise to a 2007 high adds one. |
| Technical Setup | 7/10 | 5% | +1 | Raised one. Above every average, MACD above its signal and zero, and a new all-time high on 24 September. |
Recent Developments
| Date | Development | Impact |
|---|---|---|
| Justice Department closes distributor-transaction review Bloomberg reported that Manhattan federal prosecutors will bring no action over deals with Carahsoft, including a $32m IRS transaction. SEC inquiry status unknown. Reading: Removes a legal and accounting tail without changing earnings; the SEC side remains open. | Medium | |
| Fal.Con 2026 product launches Company releases: Falcon Guardian for AI-agent runtime security, Falcon IQ agents, expanded OpenAI partnership, Falcon on the Anthropic marketplace. Reading: The product basis of the bull case; broker enthusiasm since is opinion, not adoption data. | Medium | |
| Investor briefing targets Fiscal 2028 net new ARR guided at $1,626m or more; $10bn ARR by fiscal 2030; fiscal 2029 FCF margin target 34% to 38%. Reading: Unchanged since the last report and consistent with the base case. | Medium | |
| CFO share sale under trading plan 480,000 shares sold at $259.35 to $263.51, about $125.5m, under a plan adopted 24 June. Reading: Pre-arranged, but executed at the all-time high. | Low |
Key Risks
| Risk | Probability | Severity | Comment |
|---|---|---|---|
| Valuation | High | High | 44.3x guided fiscal 2027 revenue and a 0.63% forward FCF yield; the price sits above the bull-case multiple the scenarios assume. |
| Rate-driven de-rating | Medium-High | High | The ten-year reached its highest since 2007 while the stock rose; long-duration software carries compression first. |
| Competitive bundling | Medium | High | Microsoft's bundle and a combined Palo Alto Networks and SentinelOne remain the structural threat. |
| Operational and incident risk | Low-Medium | High | A second material sensor or availability failure would be damaging out of proportion to its direct cost. |
| Sector sentiment reversal | Medium | Medium | Much of the September rise came from a sector-wide re-rating on AI-risk headlines, which can reverse on the same logic. |
| Delivery against pulled-forward targets | Medium | Medium | The $10bn ARR milestone was moved a year closer; the December quarter is the first test. |
Scenario Analysis
| Case | Probability | Fair Value | Outlook |
|---|---|---|---|
| Bull | 30% | $278 | Fiscal 2028 revenue about $7.7bn, up 28%; net new ARR beats the guide as Guardian monetises. ~37x forward revenue, trimmed from ~38x. |
| Base | 50% | $205 | Fiscal 2028 revenue about $7.48bn, up 24.6%, in line with guided ARR growth. ~28x forward revenue, trimmed from ~29x. |
| Bear | 20% | $127 | Fiscal 2028 revenue about $7.1bn, up 18%; bundling bites into net new ARR and long-duration software de-rates. ~18x, unchanged. |
The Case
Would an investor buy CrowdStrike at $259.25? Not yet. The company cleared a federal probe and its guidance stands, but the shares rose 23% in three weeks, mostly on a sector-wide AI-risk re-rating, while the ten-year yield reached a 2007 high. Fair value is trimmed to $211, 19% below the price. A return toward $190, near the rising 100-day average, or a December quarter that lifts the base case would restore a Buy.
Archived Reports
Beating The Bull keeps every past version of this report on file. Verdicts and numbers reflect what was known when each one was published.
Informational use only. Not financial advice.