Key Takeaways CRWD has surged 51.3% YTD, beating the Security industry and outperforming key peers' returns.Falcon Flex fueled revenue growth, triple ARR gains and rising multi-module customer adoption.Next-Gen SIEM posted record net new ARR, boosted by major wins and an expanded AWS partnership.CrowdStrike Holdings ((CRWD) shares have soared 51.3% year to date (YTD), outperforming the Zacks Security industry’s 15.6% growth. The stock has also outperformed the returns of other industry peers, including Sent ...

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]

Core Insights - CrowdStrike Holdings (CRWD) shares have increased by 28.3% over the past six months, outperforming the Zacks Security industry's growth of 17.4% and other peers like SentinelOne, Palo Alto Networks, and Check Point Software [1][9]. Financial Performance - CrowdStrike's revenues surpassed $1 billion for the fourth consecutive quarter in Q2 of fiscal 2026, reflecting a year-over-year growth of nearly 20.1% [5]. - The company added $221 million in net new annual recurring revenue (ARR), bringing the total ARR to $4.66 billion, which is a 20% increase from the previous year [8][9]. - In Q2, sales and non-GAAP EPS grew by 21% and 5.7% year-over-year, respectively, with management projecting at least 40% year-over-year growth in net new ARR for the second half of fiscal 2026 [10]. Subscription Model and Customer Adoption - The Falcon Flex Subscription Model has significantly contributed to CrowdStrike's revenue growth, with 48% of subscription customers adopting six or more cloud modules by the end of Q2 [6][8]. - The company has over 1,000 Falcon Flex customers, with more than 100 signing follow-on "re-Flex" deals before their contracts ended, indicating strong customer expansion [8][9]. Strategic Partnerships - CrowdStrike has formed new AI-focused partnerships with NVIDIA, Salesforce, and Meta, enhancing its long-term growth outlook [9][12]. - The integration of CrowdStrike's Falcon platform with NVIDIA's AI systems aims to secure the entire AI lifecycle, protecting over 100,000 large language models [13]. - Collaborations with KPMG, Salesforce, and Meta are expected to modernize security operations and improve detection capabilities, contributing to over 60% of new business in Q2 [15][17]. Market Position and Future Outlook - The company is well-positioned in the cybersecurity market, with a strong focus on AI-driven solutions, which are increasingly prioritized by businesses [19]. - Despite a forecasted decline in EPS for fiscal 2026, a significant recovery is anticipated in fiscal 2027 with a projected increase of 29.3% [17][18].

Core Insights - CrowdStrike Holdings (CRWD) shares have increased by 20.9% year to date, outperforming the Zacks Security industry's growth of 10.1% and other peers like SentinelOne, Palo Alto Networks, and Check Point Software [1][2][10] - The company's strong performance is attributed to robust enterprise demand for AI-native cybersecurity solutions and the success of its subscription business model [2][4] Subscription Growth and Financial Performance - CrowdStrike's revenues surpassed $1 billion for the fourth consecutive quarter, reflecting a year-over-year growth of nearly 20.1% [4] - The Falcon Flex Subscription Model has driven significant adoption, with 48% of subscription customers using six or more cloud modules by the end of Q2 [5][16] - The company achieved a record $221 million in net new annual recurring revenue (ARR) in Q2, bringing total ARR to $4.66 billion, a 20% increase from the previous year [16][17] AI Integration and Strategic Partnerships - CrowdStrike's Falcon platform is recognized as an "AI-native SOC," with strong adoption in various AI-driven functionalities [6][10] - The company has expanded its partnership with NVIDIA to secure the entire AI lifecycle, integrating its Falcon platform with NVIDIA's services [7][10] - Strategic partnerships contributed to over 60% of new business in Q2, enhancing CrowdStrike's market position [12][11] Next-Gen SIEM and Market Trends - The Next-Gen Security Information and Event Management (SIEM) ARR grew over 95% year over year, reaching over $430 million in Q2 [19][22] - Customers are increasingly moving away from legacy SIEM tools due to high costs, favoring CrowdStrike's cloud-based solution [20][22] - The acquisition of Onum aims to enhance data processing and detection capabilities within the Next-Gen SIEM [21][22] Future Outlook - Management anticipates at least 40% year-over-year growth in net new ARR in the second half of fiscal 2026, with a long-term goal of reaching $10 billion in ARR [17] - The Zacks Consensus Estimate indicates a year-over-year revenue increase of approximately 21% for both fiscal 2026 and 2027 [18][17] - Despite a projected decline in EPS for fiscal 2026, a strong recovery of 33.4% is expected in fiscal 2027 [12][18] Conclusion - CrowdStrike's leadership in AI-driven cybersecurity solutions and its subscription-based model position it as an attractive investment option amid ongoing macroeconomic challenges [23][24]

Group 1: Company Performance - CrowdStrike has seen a stock return of 25.4% over the past six months, outperforming the Zacks Security industry's growth of 13% [1] - Subscription revenues increased by 27% year-over-year, surpassing $1 billion in quarterly revenues in Q4 of fiscal 2025 [4] - The Falcon Flex Subscription Model has contributed to revenue growth by allowing customers to commit upfront and choose modules later, reducing procurement friction [4] Group 2: Customer Adoption and AI Integration - As of January 31, 2025, 67% of CrowdStrike's subscription customers adopted five or more cloud modules, with 48% using six or more, and 32% using seven or more [5] - The Falcon platform is gaining traction as an "AI-native SOC," with strong adoption in various AI-related functionalities [5] - CrowdStrike has integrated its Falcon platform with NVIDIA's Enterprise AI Factory to enhance security for AI systems and partnered with Extrahop to address shadow AI concerns [6] Group 3: Challenges and Investigations - The company is facing negative customer sentiment following a global IT outage incident on July 19, 2024, leading to the implementation of a Customer Commitment Package [7] - CrowdStrike is under federal investigation regarding a $32 million deal with Carahsoft Technology, raising concerns about potential financial irregularities [8][9] - The ongoing investigation poses legal and reputational risks, which may affect investor confidence [10] Group 4: Competitive Landscape - Competitors such as Palo Alto Networks, SentinelOne, and Cisco are positioned to attract CrowdStrike's customer base amid ongoing regulatory scrutiny [11] - CrowdStrike's Falcon Extended Detection and Response competes with similar offerings from SentinelOne and Palo Alto Networks [12][13] Group 5: Financial Outlook - The Zacks Consensus Estimate indicates a year-over-year decline of 12.5% in CrowdStrike's fiscal 2026 earnings [14] - CrowdStrike is trading at a high price-to-sales (P/S) ratio of 21.47X, significantly above the Zacks Security industry's ratio of 14.20X [15] Group 6: Conclusion - The combination of disappointing profit outlook, rising costs, and deteriorating margins makes CrowdStrike less attractive in the near term, leading to a Zacks Rank of 4 (Sell) [17]