CrowdStrike Stock Rises 29% in 3 Months: Time to Hold or Book Profits?

Core Insights - CrowdStrike Holdings (CRWD) shares have increased by 29.1% over the past three months, outperforming the Zacks Security industry's growth of 17.5% and other peers like SentinelOne, Zscaler, and Check Point Software [1][2] Financial Performance - CrowdStrike's revenues exceeded $1 billion for the fourth consecutive quarter in Q2 of fiscal 2026, reflecting a year-over-year growth of nearly 20.1% [4] - The company added $221 million in net new annual recurring revenue (ARR) during Q2, bringing total ARR to $4.66 billion, a 20% increase from the previous year [6] - Sales and non-GAAP EPS grew by 21% and 5.7% year-over-year in Q2 [8] - The Zacks Consensus Estimate predicts revenue growth of approximately 27.8% for fiscal 2026 and 21.3% for fiscal 2027 [12] Subscription Model and Customer Adoption - The Falcon Flex Subscription Model has significantly contributed to CrowdStrike's subscription gains, with 48% of subscription customers adopting six or more cloud modules by the end of Q2 [5] - Over 1,000 customers are using Falcon Flex, with more than 100 signing follow-on "re-Flex" deals, indicating strong customer expansion [6][7] Next-Gen SIEM Growth - CrowdStrike's Next-Gen Security Information and Event Management (SIEM) ARR surged over 95% year-over-year, reaching over $430 million in Q2 [9] - The cloud-based Next-Gen SIEM is gaining traction as customers move away from legacy tools due to high costs and data limitations [10] - The acquisition of Onum aims to enhance data processing and detection capabilities within the Next-Gen SIEM [11] Valuation and Market Position - CrowdStrike is currently trading at a high price-to-sales (P/S) ratio of 25.11X, significantly above the Zacks Security industry's average of 13.66X [14] - Compared to peers, CrowdStrike's P/S multiple is higher than SentinelOne, Zscaler, and Check Point Software, which have P/S multiples of 4.94X, 15.08X, and 7.74X, respectively [16] Strategic Outlook - The company is expected to maintain strong growth momentum as businesses increasingly prioritize AI-driven cybersecurity solutions [17] - Despite the premium valuation, the subscription-based model and recurring revenue streams are anticipated to provide stability and gradual growth [18]