On the European leg of its Fal.Con conference, CrowdStrike (CRWD) announced its AI Kill Switch, a new feature in Falcon Guardian, its product for securing artificial intelligence (AI) agents. The new kill switch feature lets cybersecurity teams take control of AI agents and shut them down if they start taking rogue actions.
Jim Cramer called CrowdStrike's new feature the “holy grail.” After a CNBC interview with CrowdStrike CEO George Kurtz, Cramer said that people “should just go buy CrowdStrike.” CRWD stock is already up 85% on year-to-date (YTD) basis.
More Top Stocks Daily: Go behind Wall Street’s hottest headlines with Barchart’s Active Investor newsletter.
I've covered CrowdStrike's recent growth before. Every AI agent a company adopts opens up new ways in for hackers, so the more that AI use increases, the more potential demand grows for CrowdStrike's Falcon Guardian platform. The new kill switch feature builds on that same demand.
On Nov. 2, citing growing cybersecurity demand, Deutsche Bank upgraded CRWD stock to a “Buy” rating while increasing its price target from $240 to $300. Meanwhile, Nvidia (NVDA) — one of the most valuable companies in the world — has called CrowdStrike its top security partner.
CrowdStrike Has a Great Business, But Is the Price Right?
CrowdStrike's business is booming, but a lot of the good news already seems to be priced in. CRWD stock currently trades at a huge forward price-to-earnings (P/E) multiple of 3,175 times, which is far above its five-year average. The price-to-sales (P/S) ratio of about 52 times is also well above its five-year average. That is a steep premium based on either metric.
For a company already worth nearly $247 billion, the EPS outlook is solid. Analysts expect earnings to turn positive in fiscal 2027, followed by 175% growth in fiscal 2028. But even with that growth trajectory, the stock still trades at a premium.
Back in late September, when CRWD stock was trading at its then all-time high, I argued that shares were priced so richly that it left little room for disappointment. Investors recently saw that play out in late October, when CrowdStrike fell alongside software stocks even though its own business news remained positive. CrowdStrike stock is no longer at its all-time high, but shares are still up 85% so far this year, so the risk remains, at least to some extent.
That brings us to the most interesting detail. While Jim Cramer advised investors to "just go buy" the stock, his own CNBC Investing Club sold some of its CrowdStrike stock in late October and now rates the stock as a hold. So, while Cramer made the case to buy shares, his own club recently held and trimmed its position.
Overall, I think what CrowdStrike has to offer in AI security is very strong. But at current valuation multiples, buying CrowdStrike stock right now is a stretch, to say the least.
About CrowdStrike Stock
CrowdStrike is a cybersecurity company whose Falcon platform protects devices, cloud systems, and user identities from hackers. The firm's latest focus is securing AI agents through Falcon Guardian and the AI Kill Switch feature that got Cramer so excited. Founded in 2011, the company is headquartered in Austin, Texas.
In the last 12 months, CrowdStrike stock has climbed 63%, comfortably outperforming the First Trust Nasdaq Cybersecurity ETF’s (CIBR) 20% gain over the same period. The stock has slipped 17% in the last five days, however. Rival Fortinet (FTNT) and software giant ServiceNow (NOW) recently crashed on disappointing outlooks, dragging CrowdStrike with them.
www.barchart.com Record Growth Sets a High Bar for December
CrowdStrike reported its second-quarter fiscal 2027 results on Aug. 26. Revenue rose 26% year-over-year (YOY) to $1.47 billion, while adjusted EPS of $0.31 beat the $0.29 estimate. Net new ARR hit a record $333 million, up 51% YOY. Kurtz called Q2 the “best quarter” in the company's history.
For Q3, CrowdStrike guided revenue of $1.523 billion to $1.529 billion and adjusted EPS of $0.31 again. Management also raised its full-year revenue outlook to about $6 billion and lifted its net new ARR growth target to 34%. The next earnings report is expected around Dec. 1.
What Do Analysts Expect for CrowdStrike Stock?
Based on 50 Wall Street analysts with coverage, CrowdStrike stock holds a consensus “Moderate Buy” rating. The mean price target of $255.34 indicates potential upside of 18% from current levels.
The highest price target for CrowdStrike stock is $425, while the lowest price target is $132 per share. This range is in line with the tension I’ve discussed. The demand is extraordinary, but CRWD stock has run far. So, Wall Street remains divided about where shares will go from here.
www.barchart.com On the date of publication, Jabran Kundi did not directly have a position in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
More news from Barchart
‘You Should Just Go Buy CrowdStrike,’ Says Jim Cramer. But His Own Club Rates CRWD Stock a ‘Hold.’ How Quant Strategies and Leveraged ETFs Helped Fuel Thursday's QQQ Bloodbath on Wall Street — and Whether It's Safe to Buy Yet 2 Red Flags Supermicro Investors Shouldn’t Ignore After Earnings Nasdaq Futures Climb as Chip Stocks Bounce After Rout; Key U.S. Jobs Report in Focus