Morningstar

CrowdStrike Earnings: Impressive Results Lifted by AI and Vendor Consolidation

We’ve raised our fair value estimate of CrowdStrike stock, though it still looks overvalued to us.

The logo of Crowdstrike photographed from the screen of a laptop.
Karl-Josef Hildenbrand/picture alliance via Getty
Securities in This Article
CrowdStrike Holdings Inc Class A
(CRWD)

Key Morningstar Metrics for CrowdStrike Holdings

  • Fair Value Estimate
    : $530.00
  • Morningstar Rating
    : ★★
  • Morningstar Economic Moat Rating
    : Wide
  • Morningstar Uncertainty Rating
    : Very High

What We Thought of CrowdStrike Holdings’ Earnings

CrowdStrike Holdings CRWD kicked off fiscal 2027 with strong results. The firm’s sales grew 26% to $1.39 billion, and its adjusted operating margin expanded 5 percentage points to 23.5%. The firm’s annual recurring revenue grew 24% to $5.51 billion.

Why it matters: CrowdStrike has built an enviable security platform, with solutions spanning endpoint, identity, cloud, and security operations. As customers increasingly consolidate their security spending on a smaller group of vendors, CrowdStrike’s platform is a key beneficiary.

  • CrowdStrike’s Flex program, which offers discounts to customers that commit to spending an upfront dollar amount, continues to meet this demand for vendor consolidation. ARR from Flex customers came in at $1.9 billion, up 99%.
  • Since the Flex program allows customers to pick and choose the CrowdStrike modules they’d like to use, it lowers the friction of new module adoption. We see this as a key pillar of the firm’s strong net new ARR growth, up 32% to $256 million in the quarter.

The bottom line: We raise our fair value estimate for wide-moat CrowdStrike to $530 per share from $460 after increasing our long-term profitability and growth estimates, owing to greater confidence in the firm’s artificial intelligence strategy and AI-associated revenue.

  • CrowdStrike’s shares fell more than 10% after hours after gaining close to 60% over the last month. We saw the rally leading up to the report as overly exuberant. That said, we still view shares as overvalued despite our updated valuation.

Bulls say: CrowdStrike is clearly benefiting from AI. The firm’s AI detection and response ARR grew more than 250% sequentially, while Charlotte AI, its AI-enabled security assistant, also accelerated sequentially.

  • As a CrowdStrike bull, you have to believe that this growth not only continues but inflects upward in fiscal 2028 as more agentic deployments and AI usage increase the attack surface area, benefiting CrowdStrike’s multi-module platform.

Editor’s Note: This analysis was originally published as a stock note by Morningstar Equity Research.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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