Core Viewpoint - CrowdStrike Holdings (NASDAQ: CRWD) is experiencing a mixed market response ahead of its fiscal second-quarter earnings report, with analysts divided on the company's near-term performance outlook [1][2][3]. Group 1: Stock Performance - As of midday Monday, CRWD stock is trading at $424.90, showing a year-to-date gain of 24% but has seen a pullback from August highs due to concerns raised by peer Fortinet's earnings [1]. - The stock price forecast from Evercore ISI has been lowered to $425 from $440, indicating a cautious stance ahead of earnings [3]. Group 2: Earnings Expectations - Analysts anticipate that CrowdStrike will report earnings of $0.83 per share on revenue of $1.15 billion for the fiscal second quarter, reflecting a 19% increase in revenue compared to the same period last year [2]. Group 3: Analyst Ratings and Outlook - Evercore ISI has placed CRWD on its tactical Underperform list, citing subdued channel checks and mixed feedback regarding the Falcon Complete Platform renewal cycle [3][4]. - In contrast, Cantor Fitzgerald maintains an Overweight rating, projecting an 8% year-over-year growth in new annual recurring revenue for fiscal 2026 [5]. - Citizens JMP has reaffirmed a Market Outperform rating, highlighting CrowdStrike's strong position in endpoint protection [5]. Group 4: Credit Ratings - Moody's Ratings has kept its Baa3 senior unsecured rating for CrowdStrike but upgraded its outlook to Positive from Stable, attributing this to accelerating subscription revenue and improvements in profitability [6]. Group 5: Market Sentiment - According to TipRanks, 40 Wall Street analysts rate CrowdStrike as a Moderate Buy, with an average 12-month price target of $496.59, suggesting a potential upside of about 16% from the current price [9]. - Jim Cramer has expressed a bullish sentiment towards the company, despite its high valuation [10].

Industry Overview - The cybersecurity market is projected to witness a CAGR of 12.63% from 2025 to 2030, driven by the rise of complex attacks such as credential theft and social engineering [2] Company Profiles CrowdStrike - CrowdStrike specializes in endpoint protection and extended detection and response (XDR) through its Falcon platform, which is recognized as the industry's first multi-tenant, cloud-native security solution [4] - The Falcon platform offers 29 cloud modules categorized under Endpoint Security, Security & IT Operations, and Threat Intelligence, with subscription-based sales increasing from 72% in fiscal 2017 to 95% in fiscal 2025 [5] - Despite robust revenue growth, CrowdStrike's growth rate has decelerated from over 35% year-over-year until fiscal 2024 to 29% in fiscal 2025, with further estimates suggesting a decline to around 21% for fiscal 2026 and 2027 [6] - Rising costs are a concern, with R&D expenses increasing 12-fold and S&M expenses nearly ninefold to $1.52 billion in fiscal 2025 from $173 million in fiscal 2019 [7] - The Zacks Consensus Estimate for CrowdStrike's fiscal 2026 earnings indicates a year-over-year decline of 10.9% [8] Qualys - Qualys is a leading provider of Vulnerability Management, Detection and Response (VMDR) solutions, with a growing customer base and a net dollar retention rate of 104% [11] - The company has expanded its portfolio with new product launches, including the Risk Operations Center and enhancements to its TotalAI solution [12] - Qualys' channel partner program has driven revenue growth, with channel revenues increasing 17% year-over-year compared to 4% growth from direct customers [13] - International revenue growth is at 15% year-over-year, representing 43% of total revenues, allowing for organic expansion without acquisition costs [14] - The Zacks Consensus Estimate for Qualys' 2025 earnings is pegged at $6.35 per share, indicating a year-over-year increase of 3.6% [14] Valuation and Performance - Year-to-date, CrowdStrike shares have appreciated 25.1%, while Qualys shares have declined by 7.9% [17] - Qualys is trading at a forward sales multiple of 6.82X, below the industry average of 11.97X, while CrowdStrike is trading at a forward sales multiple of 19.98X, indicating overvaluation [20] - Qualys holds a Zacks Rank 1 (Strong Buy), making it a more attractive investment compared to CrowdStrike, which has a Zacks Rank 4 (Sell) [24]

Group 1: Inclusion in "IVES AI30" List - CrowdStrike is positioned favorably in the AI revolution, with increasing module expansions and strong trading flows from Charlotte AI driving growth [2] - Roblox offers attractive incentives for developers, and its AI-driven discovery features are enhancing platform adoption, expected to lead to stronger monetization in upcoming quarters [2] - GE Vernova will benefit from the growing demand for electrification as large cloud providers continue to build data centers, providing necessary tools for grid management [2] - Nebius is experiencing strong demand in AI infrastructure, planning to increase data center capacity in the coming years [2] Group 2: Removal from "IVES AI30" List - CyberArk was removed due to Palo Alto Networks' plan to acquire it for $25 billion, as Palo Alto is already on the list [3] - C3.ai was removed following a recent sales organization restructuring and the resignation of CEO Thomas Siebel, which significantly impacts its finances, though analysts remain optimistic about its future [3] - Adobe faces concerns over its growth potential, with worries that its product portfolio may be disrupted by AI, leading to slower growth and free cash flow generation [3] - Elastic's public business growth has slowed, despite incremental funding from the U.S. federal government for software and AI improvements, with analysts favoring other tech companies for the "IVES AI30" list [3]

Group 1 - The current high stock market necessitates a selective approach to portfolio management, with a preference for selling rather than buying stocks [1] - The strategy involves reallocating proceeds into cash or small/mid-cap value stocks until more favorable market conditions arise [1] - The analyst has extensive experience in technology sectors, having worked on Wall Street and in Silicon Valley, and has been advising seed-round startups [1]

Core Insights - Palo Alto Networks is a leader in AI-powered cybersecurity, investing heavily in innovations to maintain its top position against competitors like CrowdStrike [1] - The company is set to release its fiscal 2025 fourth quarter results on August 18, which will provide insights into its AI product portfolio [2] Group 1: AI Product Portfolio - Palo Alto operates three cybersecurity platforms: cloud security, network security, and security operations, integrating AI to enhance automation in threat detection and incident response [3] - The Cortex XSIAM platform exemplifies Palo Alto's AI application, autonomously identifying and eliminating threats, significantly reducing the workload on human cybersecurity managers [4] - A healthcare provider using XSIAM has seen automation resolve 90% of incidents, up from 10%, with the platform's annual recurring revenue tripling year over year during fiscal 2025 Q3 [5] Group 2: Revenue Growth - Palo Alto generated $2.3 billion in total revenue during fiscal 2025 Q3, reflecting a 15% year-over-year increase, an acceleration from the previous quarter's 14% growth [6] - The company's next-generation security segment, which includes AI products, saw a 34% increase in annual recurring revenue, reaching $5.1 billion [7] Group 3: Market Strategy - The trend of "platformization" is helping Palo Alto consolidate its market position, encouraging customers to use its comprehensive security solutions instead of multiple vendors [8] - By the end of Q3, approximately 1,250 of its top 5,000 customers had adopted the platform strategy, marking a 39% year-over-year increase, indicating the effectiveness of this approach [9] Group 4: Stock Valuation - Despite its leadership, Palo Alto's stock is trading at a lower price-to-sales ratio of 13.3 compared to CrowdStrike, which has a higher growth rate [10] - Palo Alto's NGS ARR of $5.1 billion exceeds CrowdStrike's total ARR, growing at a faster rate, suggesting that Palo Alto's stock may be undervalued [11] - The stock is currently 20% below its record high, presenting a potential buying opportunity for long-term investors [12]

Core Viewpoint - CrowdStrike Holdings Inc. has experienced a decline of 9.76% in the last 30 trading days, yet it remains one of the best-performing technology stocks in the S&P 500 with a 79% increase in 2025, following a year-long rally initiated by effective damage control after a software outage [1][2]. Financial Performance - The company reported $194 million in new net annual recurring revenue (ARR) for the first quarter of its 2026 fiscal year, a critical metric for cybersecurity firms indicating year-over-year revenue retention [7]. - CrowdStrike achieved its first $1 billion in quarterly revenue recently, indicating a market share of under 5% in its core cybersecurity market, which is projected to be $103 billion [10][14]. - The forward price-to-earnings (P/E) ratio stands at 771x, influenced by negative GAAP earnings of 44 cents in the last quarter due to high stock-based compensation [11][13]. Market Outlook - The total addressable market (TAM) for AI-native cybersecurity platforms is estimated at $116 billion for the current year, expected to grow to $250 billion by 2029 [9]. - CrowdStrike's guidance suggests a potential to generate over $1.3 billion in adjusted operating profit for FY2026, making its forward multiple appear reasonable on a non-GAAP basis [13]. Product Development - The company is expanding its AI-native Falcon platform, which is utilized by approximately 92% of Fortune 500 companies in various business areas [4]. - Recent launches include AI Systems Security Assessment and AI for SecOps Readiness, aimed at securing AI systems and integrating AI into security operations [6]. Stock Performance and Technical Analysis - CrowdStrike stock has lost bullish momentum, crossing below its 50-day simple moving average, with an RSI around 36 indicating potential for a trend reversal with strong earnings [15]. - Resistance is noted at $475, with support levels around $400 and a significant buying opportunity around $375 to $380 if the stock declines further [16].

Core Viewpoint - Fortinet Inc (NASDAQ:FTNT) experienced a significant decline of 25.9%, trading at $71.61, following a disappointing fiscal third-quarter outlook despite a second-quarter earnings win and matched revenue forecasts [1] Company Performance - Fortinet's second-quarter earnings were positive, but the negative guidance for the third quarter is impacting its stock performance [1] - Morgan Stanley downgraded Fortinet from "overweight" to "equal-weight" and reduced its price target from $110 to $78 [2] - If the current losses persist, Fortinet could face its worst one-day decline ever and may end up in negative territory for the year [2] Stock Trends - Fortinet shares are trading at their lowest in nearly 12 months and have fallen below a critical support level of $95 [2] - Crowdstrike Holdings Inc (NASDAQ:CRWD) is down 6.1% to $423.97, influenced by Alphabet's divestment of its stake in the company, although it still shows a 23.4% year-to-date gain [3] - SentinelOne Inc (NYSE:S) is down 5.2% to $16.42, with a 41.5% deficit over the past nine months, approaching its first close below $17 since April 22 [3] Options Activity - Fortinet is experiencing unusual options activity with 10 times the usual intraday average volume, particularly in the weekly 8/8 70-strike put [4] - Crowdstrike is also seeing increased options activity, with double the usual put volume, led by the September 420 put [4]

Core Viewpoint - CrowdStrike Holdings Inc. has experienced a significant decline in stock price, down over 14% in the last 30 days, despite a generally bullish earnings season for technology stocks [1] Company Performance - Despite the recent pullback, CRWD stock is still up 29.25% in 2025, over 99% in the last 12 months, and more than 285% in the last five years [2] - The company capitalized on a previous software update glitch to drive revenue growth by allowing customers to test its Falcon platform [3] - The latest quarter saw a 100% year-over-year gain in annual recurring revenue (ARR), although revenue expectations were missed [5] AI Integration - CrowdStrike's Falcon platform is cloud-native and AI-first, with the introduction of Charlotte AI to automate detection and response to emerging threats [4] Earnings Guidance - For the upcoming earnings report on August 27, CrowdStrike guided for revenue between $1.14 and $1.15 billion, indicating a 3% sequential improvement and an approximate 18% year-over-year increase [6] - Analysts forecast revenue at $1.15 billion, suggesting that even at the high end of guidance, CrowdStrike would only meet expectations [7] Market Sentiment - Analysts maintain a price target of $461.17 for CRWD stock, with a moderate buy rating based on 46 analyst ratings [10] - The stock has broken below its 100-day simple moving average, indicating potential resistance and increasing selling momentum [11] Options Market - The options chain for August 29 shows a bearish bias, with a 43% chance that the stock will close below $450 [14] Institutional Activity - Institutions may be preparing to buy CRWD stock at lower levels, potentially between $420 and $425, as they signal that the stock is currently expensive compared to its past and peers [16]

Key Takeaways One-Month Price Return Performance Image Source: Zacks Investment Research This underperformance raises the question: Should investors cut their losses and exit, or is it worth holding CRWD stock? CrowdStrike's Premium Valuation: A Key Concern CRWD's lofty valuation make it vulnerable to further correction. CrowdStrike is currently trading at a high price-to-sales (P/S) multiple, far above the Zacks Security industry. CrowdStrike's forward 12-month P/S ratio sits at 21.38X, significantly highe ...

Analyst's Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or a ...