CrowdStrike Holdings CRWD 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 30.45X, significantly higher than the Zacks Security industry’s forward 12-month P/S ratio of 15.98X. The Zacks Value Score of F also suggests that CRWD stock is overvalued.
Forward 12-Month P/S Ratio
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CRWD stock also trades at a higher P/S multiple compared with other industry peers, including Qualys Inc. QLYS, Okta OKTA and SentinelOne S. At present, Qualys, Okta and SentinelOne have P/S multiples of 6.94X, 7.39X and 4.65X, respectively.
While this elevated valuation reflects investor confidence in the company’s long-term potential, it also raises concerns about whether the stock can justify such lofty multiples, especially amid near-term challenges.
CrowdStrike Encounters Slowing Sales Growth
Although CrowdStrike has experienced impressive growth since its IPO, recent quarterly reports have shown a deceleration in its growth rate. The company's revenue growth, while still robust, is not as explosive as in previous years.
CrowdStrike had enjoyed more than 35% year-over-year top-line growth till fiscal 2024. However, the growth rate decelerated to 29% in fiscal 2025 and further decelerated to 22% in fiscal 2026.
For fiscal 2027, CrowdStrike expects total revenues to be in the range of $5.915 billion to $5.959 billion, indicating a year-over-year increase of 23% to 24%. While the Zacks Consensus Estimate for fiscal 2027 revenues indicates a year-over-year increase of 23.5%, the same for fiscal 2028 suggests that the top-line growth will further decelerate to around 21.6%. This indicates that the deceleration in CrowdStrike's revenue growth is likely to continue in the upcoming years.
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Despite near-term concerns, the growing adoption of the Falcon Flex subscription model is anticipated to boost CrowdStrike's prospects in the coming quarters.
Falcon Flex Adoption Aids CrowdStrike’s Subscription Gains
CrowdStrike’s subscription business model is driving its overall top-line performance. The company’s revenues crossed the $1 billion mark for the seventh consecutive time during the first quarter of fiscal 2027 and marked a year-over-year improvement of nearly 26%. This was partly achieved due to the strong adoption of the Falcon Flex Subscription Model, which allows customers to commit upfront and later choose modules, eliminating procurement friction.
CrowdStrike’s subscription customers, who adopted six or more cloud modules, represented 51% of the total subscription customers at the end of the second quarter. Those with seven or more cloud modules accounted for 35%, and those with eight or more cloud modules represented 25% as of April 30, 2026. In the first quarter, Annual Recurring Revenues (ARR) from Falcon Flex customers were more than $1.9 billion, rising 99% on a year-over-year basis. Management said Falcon Flex is now one of the most common ways customers choose to buy and expand on the Falcon platform.
Falcon Flex helps customers adopt new modules without long contract steps, which leads to faster platform usage. This is also driving strong re-Flex activity, where more than 380 customers expanded their Flex contracts in the fourth quarter. In the first quarter of fiscal 2027, CrowdStrike added more than 300 Flex customers and ended the first quarter with over 1,900 customers who have adopted Falcon Flex.
Falcon Flex helps customers adopt new modules without long contract steps, which leads to faster platform usage. The model is helping CrowdStrike benefit from platform consolidation. Customers are using Flex to adopt additional offerings such as Next-Gen SIEM, Identity Protection, Cloud Security and AI Detection and Response without negotiating separate contracts. If these patterns continue, Falcon Flex could remain one of CrowdStrike’s most important growth drivers through fiscal 2027 and beyond.
These factors seem to have instilled investors’ confidence in CRWD’s prospects, as reflected in a rise in share price over the past six months. CRWD stock has surged 62% over the past six months, outperforming the industry’s return of 25.5%. The stock has outperformed its industry peers as well, such as Qualys, Okta and SentinelOne. Over the past six months, shares of Qualys, Okta and SentinelOne have returned 12.3%, 50.7% and 12.8%, respectively.
6-Month Price Return Performance
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Key Technical Indicator Signals Bullish Trend for CRWD
CRWD shares are trading above their 50-day & 200-day moving averages, a bullish technical signal that indicates the potential for continued upward momentum in the near term.
CRWD’s 50-Day & 200-Day Simple Moving Averages
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Conclusion: Hold CrowdStrike Stock Right Now
As businesses continue prioritizing AI-driven cybersecurity solutions, CrowdStrike’s leadership in threat prevention, response and recovery will only strengthen. The company’s subscription-based model and recurring revenue streams should provide stability and gradual growth, even amid ongoing macroeconomic challenges and geopolitical issues.
However, the company’s premium valuation and slowing sales growth warrant a cautious approach to the stock. CrowdStrike currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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