CrowdStrike Holdings CRWD shares have soared 18.7% in the past three months, outperforming the Zacks Security industry’s 6.3% growth. The stock has also outperformed the returns of other industry peers, including Fortinet FTNT, Zscaler ZS and Check Point Software CHKP. In the past three months, shares of Zscaler and Check Point Software have plunged 14.8% and 35.4%, respectively, while Fortinet shares have jumped 7.8%.
CrowdStrike has been riding on strong enterprise demand for artificial intelligence (AI)-native cybersecurity solutions. But with the stock outperforming the industry and peers, the question arises: Does it still have room to run, or is it time for investors to consider taking profits? Let’s find out.
3-Month Price Return Performance
Image Source: Zacks Investment Research
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 sixth consecutive time during the fourth quarter of fiscal 2026 and marked a year-over-year improvement of nearly 23%. 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 50% of the total subscription customers at the end of the second quarter. Those with seven or more cloud modules accounted for 34%, and those with eight or more cloud modules represented 24% as of Jan. 31, 2026. In the fourth quarter, Annual Recurring Revenues (ARR) from Falcon Flex customers reached $1.69 billion, rising more than 120% 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. CrowdStrike added more than 350 Flex customers in the fourth quarter and ended fiscal 2026 with over 1,600 customers who have adopted Falcon Flex.
Falcon Flex helps customers adopt new modules without long contract steps, which leads to faster platform usage. This structure is leading to larger deals. Notable examples during the fourth quarter include a large enterprise software company. The customer initially started with CrowdStrike’s threat intelligence module, and is now using 25 different CrowdStrike modules after adopting the Falcon Flex model, committing to a total Falcon Flex contract value of $86 million.
If these patterns continue, Falcon Flex could remain one of CrowdStrike’s most important growth drivers through fiscal 2027 and beyond.
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 $5.868 billion to $5.928 billion, indicating a year-over-year increase of 22% to 23%. While the Zacks Consensus Estimate for fiscal 2027 revenues indicates a year-over-year increase of 23%, the same for fiscal 2028 suggests that the top-line growth will further decelerate to around 21%. This indicates that the deceleration in CrowdStrike's revenue growth is likely to continue in the upcoming years.
Image Source: Zacks Investment Research
Valuation: CRWD Trades Above Industry and Peers
CrowdStrike 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 18.55X, significantly higher than the Zacks Security industry’s forward 12-month P/S ratio of 10.78X. The Zacks Value Score of F also suggests that CRWD stock is overvalued.
Forward 12 Month P/S Ratio
Image Source: Zacks Investment Research
CRWD stock also trades at a higher P/S multiple compared with other industry peers, including Fortinet, Zscaler and Check Point Software. At present, Fortinet, Zscaler and Check Point Software have P/S multiples of 8.33X, 6.00X and 4.18X, respectively.
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.
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.
Free: See Our Top Stock And 4 Runners UpCheck Point Software Technologies Ltd. (CHKP) : Free Stock Analysis Report
Fortinet, Inc. (FTNT) : Free Stock Analysis Report
Zscaler, Inc. (ZS) : Free Stock Analysis Report
CrowdStrike (CRWD) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
