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For the third quarter, CrowdStrike projects total revenues between $979.2 million and $984.7 million. The Zacks Consensus Estimate for revenues is pegged at $982.3 million, which indicates growth of 25% from the year-ago quarter's level.
CrowdStrike anticipates non-GAAP earnings between 80 cents and 81 cents per share. The consensus mark for the bottom line has been revised a penny downward to 81 cents per share over the past 60 days and indicates a 1.2% year-over-year decline.
Image Source: Zacks Investment Research
The company has consistently demonstrated impressive financial performance, underpinned by its subscription-based revenue model. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 9.3%.
As CrowdStrike approaches its third-quarter earnings announcement, let’s see if it is the right time to invest in this stock.
Factors Influencing CrowdStrike’s Q3 Results
CrowdStrike’s third-quarter results are likely to reflect the benefits of the continued solid demand for its products, given the healthy environment of the global security market. The increasing number of people logging into employers' networks has triggered a greater need for security and might have spurred the demand for CRWD’s products in the fiscal third quarter. A strong pipeline of deals indicates the same.
Stellar revenue growth in subscriptions might have contributed significantly to the third-quarter top line. The increasing number of net new subscription customers may have acted as a tailwind. The Zacks Consensus Estimate for Subscription revenues is pegged at $936.6 million, indicating a year-over-year improvement of 27.7%. However, revenues from the Professional Services segment are likely to decrease 6.7% year over year to $49 million in the third quarter.
CrowdStrike’s collaboration with Amazon Web Services (“AWS”) is an upside, benefiting the company from its products’ availability on the AWS platform. The expansion in the volume of transactions through Amazon’s AWS Marketplace, growth in co-selling opportunities with AWS salesforce and the uptake of AWS service integrations are likely to have contributed to CRWD’s earnings in the to-be-reported quarter.
However, the July 19 global IT outage incident is likely to have negatively impacted sales growth in the third quarter. During its second-quarter earnings call, CrowdStrike stated that it expects to see an extended sales cycle with additional scrutiny requiring higher management-level approval for new deals by some organizations due to the global IT outage incident.
Elevated expenses for enhancing sales and marketing capabilities and increased investments in research and development are also likely to have weighed on the company’s fiscal third-quarter bottom line.
CrowdStrike’s Price Performance & Valuation
Year to date, shares of CrowdStrike have risen 45.8%, underperforming the Zacks Internet – Software industry’s growth of 31.2%. Compared with other major cybersecurity players, CRWD stock has outperformed Juniper Networks and Palo Alto Networks (PANW - Free Report) but underperformed Fortinet (FTNT - Free Report) . JNPR, PANW and FTNT stocks have rallied 21.8%, 30% and 58.5%, respectively, YTD.
YTD Price Return Performance
Image Source: Zacks Investment Research
Now, let’s look at the value CrowdStrike offers investors at the current levels. CRWD stock is trading at a premium with a forward 12-month P/S of 19.81X compared with the industry’s 2.99X, reflecting a stretched valuation.
Image Source: Zacks Investment Research
Investment Thesis for CRWD Stock
CrowdStrike stock has made a remarkable comeback following the significant dip in its share price triggered by the global IT outage on July 19. The company has adopted proactive measures following the incident, including the rollout of new automated recovery techniques and enhancements to the Falcon platform. This effort included bolstering content visibility and control, improved quality assurance and an external review to strengthen platform security. Such strategic moves are essential to restoring and maintaining customer trust, a critical factor in retaining market leadership.
The Falcon platform’s comprehensive range, spanning more than 28 modules that include endpoint protection, identity security and next-gen SIEM, ensures a diversified growth path. CrowdStrike’s cloud security, identity protection and LogScale SIEM businesses collectively surpassed $1 billion in ARR in the second quarter, growing more than 85% year over year. This diversified portfolio positions the company well to withstand industry volatility and adapt to evolving client needs.
CrowdStrike’s strategic positioning in the cybersecurity landscape is evidenced by its continuous partnerships and customer endorsements. Even after the incident, significant deals were secured, demonstrating that clients still view CrowdStrike as a trusted partner for security solutions. Notable wins included a nine-figure contract in the cloud security domain and multiple eight-figure deals, underscoring the firm’s strong sales pipeline and growth potential.
Moreover, the company's “Falcon Flex” subscription model, which simplifies module adoption and supports customer expansion, has become a cornerstone for driving higher customer retention. This model allows enterprises to scale their cybersecurity needs without procurement friction, supporting long-term engagement and revenue growth.
Despite these upsides, CrowdStrike is not immune to headwinds. The global IT outage incident has imposed short-term pressures, including extending sales cycles and shifting certain deals into upcoming quarters. The company’s third-quarter guidance reflects caution, with expectations of muted upsell activity and temporarily elevated contract durations impacting net new ARR. Management’s projection that these challenges will subside over a year implies near-term fluctuations but signals a return to growth by fiscal 2026.
Conclusion: Hold CRWD Stock for Now
While CrowdStrike’s recent surge is impressive, and the long-term growth outlook remains compelling, holding the stock is a wise choice for now. The company’s history of strong quarterly performance, innovative strategies and strong customer relationships underscore its resilience. However, given near-term operational challenges and the potential for extended sales cycles, maintaining a hold position allows investors to benefit from long-term gains while weathering any short-term volatility.
CrowdStrike’s fundamental strengths position it as a cybersecurity leader, making it a stock worth holding as it navigates the remainder of fiscal 2025 and beyond. CRWD stock currently carries 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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CrowdStrike Set to Report Q3 Earnings: Buy, Sell or Hold the Stock?
CrowdStrike Holdings, Inc. (CRWD - Free Report) is scheduled to release third-quarter fiscal 2025 results on Nov. 26.
For the third quarter, CrowdStrike projects total revenues between $979.2 million and $984.7 million. The Zacks Consensus Estimate for revenues is pegged at $982.3 million, which indicates growth of 25% from the year-ago quarter's level.
CrowdStrike anticipates non-GAAP earnings between 80 cents and 81 cents per share. The consensus mark for the bottom line has been revised a penny downward to 81 cents per share over the past 60 days and indicates a 1.2% year-over-year decline.
Image Source: Zacks Investment Research
The company has consistently demonstrated impressive financial performance, underpinned by its subscription-based revenue model. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 9.3%.
CrowdStrike Price and EPS Surprise
CrowdStrike price-eps-surprise | CrowdStrike Quote
As CrowdStrike approaches its third-quarter earnings announcement, let’s see if it is the right time to invest in this stock.
Factors Influencing CrowdStrike’s Q3 Results
CrowdStrike’s third-quarter results are likely to reflect the benefits of the continued solid demand for its products, given the healthy environment of the global security market. The increasing number of people logging into employers' networks has triggered a greater need for security and might have spurred the demand for CRWD’s products in the fiscal third quarter. A strong pipeline of deals indicates the same.
Stellar revenue growth in subscriptions might have contributed significantly to the third-quarter top line. The increasing number of net new subscription customers may have acted as a tailwind. The Zacks Consensus Estimate for Subscription revenues is pegged at $936.6 million, indicating a year-over-year improvement of 27.7%. However, revenues from the Professional Services segment are likely to decrease 6.7% year over year to $49 million in the third quarter.
CrowdStrike’s collaboration with Amazon Web Services (“AWS”) is an upside, benefiting the company from its products’ availability on the AWS platform. The expansion in the volume of transactions through Amazon’s AWS Marketplace, growth in co-selling opportunities with AWS salesforce and the uptake of AWS service integrations are likely to have contributed to CRWD’s earnings in the to-be-reported quarter.
However, the July 19 global IT outage incident is likely to have negatively impacted sales growth in the third quarter. During its second-quarter earnings call, CrowdStrike stated that it expects to see an extended sales cycle with additional scrutiny requiring higher management-level approval for new deals by some organizations due to the global IT outage incident.
Elevated expenses for enhancing sales and marketing capabilities and increased investments in research and development are also likely to have weighed on the company’s fiscal third-quarter bottom line.
CrowdStrike’s Price Performance & Valuation
Year to date, shares of CrowdStrike have risen 45.8%, underperforming the Zacks Internet – Software industry’s growth of 31.2%. Compared with other major cybersecurity players, CRWD stock has outperformed Juniper Networks and Palo Alto Networks (PANW - Free Report) but underperformed Fortinet (FTNT - Free Report) . JNPR, PANW and FTNT stocks have rallied 21.8%, 30% and 58.5%, respectively, YTD.
YTD Price Return Performance
Image Source: Zacks Investment Research
Now, let’s look at the value CrowdStrike offers investors at the current levels. CRWD stock is trading at a premium with a forward 12-month P/S of 19.81X compared with the industry’s 2.99X, reflecting a stretched valuation.
Image Source: Zacks Investment Research
Investment Thesis for CRWD Stock
CrowdStrike stock has made a remarkable comeback following the significant dip in its share price triggered by the global IT outage on July 19. The company has adopted proactive measures following the incident, including the rollout of new automated recovery techniques and enhancements to the Falcon platform. This effort included bolstering content visibility and control, improved quality assurance and an external review to strengthen platform security. Such strategic moves are essential to restoring and maintaining customer trust, a critical factor in retaining market leadership.
The Falcon platform’s comprehensive range, spanning more than 28 modules that include endpoint protection, identity security and next-gen SIEM, ensures a diversified growth path. CrowdStrike’s cloud security, identity protection and LogScale SIEM businesses collectively surpassed $1 billion in ARR in the second quarter, growing more than 85% year over year. This diversified portfolio positions the company well to withstand industry volatility and adapt to evolving client needs.
CrowdStrike’s strategic positioning in the cybersecurity landscape is evidenced by its continuous partnerships and customer endorsements. Even after the incident, significant deals were secured, demonstrating that clients still view CrowdStrike as a trusted partner for security solutions. Notable wins included a nine-figure contract in the cloud security domain and multiple eight-figure deals, underscoring the firm’s strong sales pipeline and growth potential.
Moreover, the company's “Falcon Flex” subscription model, which simplifies module adoption and supports customer expansion, has become a cornerstone for driving higher customer retention. This model allows enterprises to scale their cybersecurity needs without procurement friction, supporting long-term engagement and revenue growth.
Despite these upsides, CrowdStrike is not immune to headwinds. The global IT outage incident has imposed short-term pressures, including extending sales cycles and shifting certain deals into upcoming quarters. The company’s third-quarter guidance reflects caution, with expectations of muted upsell activity and temporarily elevated contract durations impacting net new ARR. Management’s projection that these challenges will subside over a year implies near-term fluctuations but signals a return to growth by fiscal 2026.
Conclusion: Hold CRWD Stock for Now
While CrowdStrike’s recent surge is impressive, and the long-term growth outlook remains compelling, holding the stock is a wise choice for now. The company’s history of strong quarterly performance, innovative strategies and strong customer relationships underscore its resilience. However, given near-term operational challenges and the potential for extended sales cycles, maintaining a hold position allows investors to benefit from long-term gains while weathering any short-term volatility.
CrowdStrike’s fundamental strengths position it as a cybersecurity leader, making it a stock worth holding as it navigates the remainder of fiscal 2025 and beyond. CRWD stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.