Key Morningstar Metrics for CrowdStrike Holdings
- : USD 152Fair Value Estimate
- : ★★★Morningstar Rating
- : WideMorningstar Economic Moat Rating
- : Very HighMorningstar Uncertainty Rating
What We Thought of CrowdStrike Holdings’ Earnings
CrowdStrike CRWD closed out its second quarter of fiscal 2027 with sales growing 26% to USD 1.47 billion and adjusted operating margins expanding 350 basis points to 25.3%. The firm added a record USD 333 million in net new annual recurring revenue, or ARR, up 51%.
Why it matters: CrowdStrike’s business is firing on all cylinders, with the firm’s ARR expanding 25% to USD 5.84 billion. Beyond its core endpoint solution, cloud, identity, and security operations grew a combined 39% and now contribute 37% of total ARR.
- This top-line reacceleration is driven by increased spending on cyber solutions as enterprises beef up defenses against increasingly capable AI-driven cyber attacks. In this arms race-type scenario, cyber vendors are seeing clear business wins.
- Enterprise buying momentum can be gauged by forward-looking metrics such as remaining performance obligations, or RPO, which grew 49%, highlighting the large deals the firm is signing as customers consolidate cyber spending on CrowdStrike’s platform.
The bottom line: We raise our fair value estimate for wide-moat CrowdStrike to USD 152, up from USD 133. Shares traded up more than 10% after hours.
- While we continue to view them as overvalued in our base case, we also model a separate bull case for CrowdStrike, which results in a fair value of USD 230. Our bull case incorporates a material acceleration in fiscal 2028 and strong growth after that, driven largely by AI-induced cyber demand.
- At current levels, CrowdStrike’s enterprise value is roughly 35 times fiscal 2027’s expected sales, far above the median 10 times sales for our broader cyber coverage. Put another way, the stock is priced for perfection.
Key stats: Ending ARR from customers that have adopted CrowdStrike’s Flex program more than doubled to USD 2.3 billion. We see this trend as a clear vote of confidence in the firm’s platform consolidation strategy.
