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Should You Buy, Sell or Hold CrowdStrike Stock Before Q3 Earnings?
Read MoreHide Full Article
Key Takeaways
CrowdStrike expects Q3 revenues of $1.208B-$1.218B and EPS of 93-95 cents.
Falcon Flex and strong ARR growth highlight expanding customer adoption.
Next-Gen SIEM surged more than 95% in ARR during Q2 as customers shift from legacy tools.
CrowdStrike ((CRWD - Free Report) ) is scheduled to report its third-quarter fiscal 2026 results on Dec. 2, 2025.
CrowdStrike anticipates revenues between $1.208 billion and $1.218 billion for the third quarter of fiscal 2026. The Zacks Consensus Estimate for CrowdStrike’s fiscal third-quarter revenues is pegged at $1.21 billion, indicating year-over-year growth of 20.2%.
For the fiscal third quarter, the company expects non-GAAP earnings per share between 93 cents and 95 cents. The Zacks Consensus Estimate for CrowdStrike’s fiscal third-quarter earnings stands at 94 cents, implying a year-over-year increase of 1.1%. The consensus mark for earnings has remained unchanged over the past 60 days.
Image Source: Zacks Investment Research
CrowdStrike’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 14.7%.
Our proven model does not conclusively predict an earnings beat for CrowdStrike this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here. You can seethe complete list of today’s Zacks #1 Rank stocks here.
CrowdStrike has an Earnings ESP of 0.00% and carries a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Factors Likely to Influence CRWD’s Q3 Results
CrowdStrike’s third-quarter fiscal 2026 results are likely to benefit from the robust demand for its cybersecurity products, given the increasing number of threat incidents across the globe. As a rising number of employees log into the enterprise's network, the vulnerabilities of cyber breaches lead to a greater need for security. These factors are likely to have spurred the demand for CrowdStrike’s products in the fiscal third quarter.
CrowdStrike’s Falcon Flex subscription model is expected to remain a major growth driver. During the second quarter, the company added $221 million in net new annual recurring revenues (ARR). This pushed up CrowdStrike’s total ARR to $4.66 billion, representing an increase of 20% from last year. A big part of this growth came from Falcon Flex, CrowdStrike’s subscription model.
The company now has more than 1,000 Falcon Flex customers, and more than 100 have already signed follow-on “re-Flex” deals before their contracts ended. These re-Flex deals are important because they show customers are expanding faster than expected, often boosting ARR by nearly 50%. CrowdStrike’s robust pipeline of deals indicates that the company is ideally positioned to capitalize on this opportunity.
CrowdStrike is seeing strong momentum in its Next Generation (Next-Gen) Security Information and Event Management (“SIEM”) as part of its mission to protect enterprises against evolving cyber threats. In the second quarter of fiscal 2026, SIEM ARR grew more than 95% year over year, reaching more than $430 million. The momentum is likely to have continued in the to-be-reported quarter.
In the second quarter, management noted that customers are moving away from legacy SIEM tools because of high costs and data limitations. This is where CrowdStrike’s Next-Gen SIEM comes into play. Next-Gen SIEM is cloud-based, integrated into the Falcon platform, and also priced differently, where customers do not pay for data generated inside Falcon but only for third-party data ingested. This model is helping CrowdStrike win large replacement deals, including a recent seven-figure legacy SIEM displacement at a Global 2000 communications company.
CrowdStrike has enhanced AI-based capabilities like AI Model Scanning, Shadow AI detection and Charlotte AI Agentic Detection Triage. In the second quarter of fiscal 2026, Charlotte AI’s usage grew 85% compared with the prior quarter. The adoption of Charlotte AI is already tied to new customer deals. One such example is a Fortune 500 software company, which signed an eight-figure re-Flex deal to include Charlotte AI as part of its deal to modernize its SOC. The company renewed its contract 18 months before the expiration of the initial Falcon Flex subscription and also replaced a legacy and a hyperscaler SIEM in the process.
CRWD Price Performance & Stock Valuation
In the year-to-date period, shares of CrowdStrike have climbed 46.9%, outperforming the Zacks Security industry and its peers, including Check Point Software ((CHKP - Free Report) ), Palo Alto Networks ((PANW - Free Report) ) and SentinelOne ((S - Free Report) ).
The Zacks Security industry has returned 12.1% year to date. Shares of Palo Alto Networks have returned 2%, while Check Point Software and SentinelOne shares have plunged 1.7% and 28%, respectively.
YTD Price Return Performance
Image Source: Zacks Investment Research
Now, let’s look at the value CrowdStrike offers investors at the current levels. CrowdStrike is trading at a premium with a forward 12-month P/S of 22.41 compared with the industry’s 12, reflecting a stretched valuation.
Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
CrowdStrike stock also trades at a higher P/S multiple compared with other industry peers, including Checkpoint Software, Palo Alto Networks and SentinelOne. At present, Checkpoint Software, Palo Alto Networks and SentinelOne have P/S multiples of 7.04, 11.81 and 4.55, respectively.
Investment Consideration for CrowdStrike
A significant driver of new customer addition is the Falcon Flex subscription model, which simplifies security adoption by offering modular, scalable cybersecurity solutions. CrowdStrike secured major deals in the last reported quarter, including an eight-figure re-Flex agreement with a Fortune 500 software company, showing strong enterprise demand. This shows CrowdStrike’s ability to attract high-value customers, encourages long-term commitments, steady revenue growth and deep customer integration.
However, CrowdStrike’s rising costs are a cause of concern. Over the last six fiscals, CrowdStrike’s Research & Development expenses increased twelvefold, while Sales & Marketing expenses rose nearly ninefold to $1.52 billion in fiscal 2025 from $173 million in fiscal 2019. Though the firm foresees these investments generating benefits over the long run, higher expenses are expected to weigh on the company’s bottom-line results.
Conclusion: Hold CrowdStrike Stock for Now
As businesses continue prioritizing AI-driven cybersecurity solutions, CrowdStrike’s leadership in threat prevention, response and recovery will only strengthen. However, rising costs, shrinking profits and premium valuation warrant a cautious approach to the stock. So, it is prudent for existing investors to remain invested, while new investors should wait for a better entry point.
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Should You Buy, Sell or Hold CrowdStrike Stock Before Q3 Earnings?
Key Takeaways
CrowdStrike ((CRWD - Free Report) ) is scheduled to report its third-quarter fiscal 2026 results on Dec. 2, 2025.
CrowdStrike anticipates revenues between $1.208 billion and $1.218 billion for the third quarter of fiscal 2026. The Zacks Consensus Estimate for CrowdStrike’s fiscal third-quarter revenues is pegged at $1.21 billion, indicating year-over-year growth of 20.2%.
For the fiscal third quarter, the company expects non-GAAP earnings per share between 93 cents and 95 cents. The Zacks Consensus Estimate for CrowdStrike’s fiscal third-quarter earnings stands at 94 cents, implying a year-over-year increase of 1.1%. The consensus mark for earnings has remained unchanged over the past 60 days.
Image Source: Zacks Investment Research
CrowdStrike’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 14.7%.
CrowdStrike Price and EPS Surprise
CrowdStrike price-eps-surprise | CrowdStrike Quote
Earnings Whispers for CRWD
Our proven model does not conclusively predict an earnings beat for CrowdStrike this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.
CrowdStrike has an Earnings ESP of 0.00% and carries a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Factors Likely to Influence CRWD’s Q3 Results
CrowdStrike’s third-quarter fiscal 2026 results are likely to benefit from the robust demand for its cybersecurity products, given the increasing number of threat incidents across the globe. As a rising number of employees log into the enterprise's network, the vulnerabilities of cyber breaches lead to a greater need for security. These factors are likely to have spurred the demand for CrowdStrike’s products in the fiscal third quarter.
CrowdStrike’s Falcon Flex subscription model is expected to remain a major growth driver. During the second quarter, the company added $221 million in net new annual recurring revenues (ARR). This pushed up CrowdStrike’s total ARR to $4.66 billion, representing an increase of 20% from last year. A big part of this growth came from Falcon Flex, CrowdStrike’s subscription model.
The company now has more than 1,000 Falcon Flex customers, and more than 100 have already signed follow-on “re-Flex” deals before their contracts ended. These re-Flex deals are important because they show customers are expanding faster than expected, often boosting ARR by nearly 50%. CrowdStrike’s robust pipeline of deals indicates that the company is ideally positioned to capitalize on this opportunity.
CrowdStrike is seeing strong momentum in its Next Generation (Next-Gen) Security Information and Event Management (“SIEM”) as part of its mission to protect enterprises against evolving cyber threats. In the second quarter of fiscal 2026, SIEM ARR grew more than 95% year over year, reaching more than $430 million. The momentum is likely to have continued in the to-be-reported quarter.
In the second quarter, management noted that customers are moving away from legacy SIEM tools because of high costs and data limitations. This is where CrowdStrike’s Next-Gen SIEM comes into play. Next-Gen SIEM is cloud-based, integrated into the Falcon platform, and also priced differently, where customers do not pay for data generated inside Falcon but only for third-party data ingested. This model is helping CrowdStrike win large replacement deals, including a recent seven-figure legacy SIEM displacement at a Global 2000 communications company.
CrowdStrike has enhanced AI-based capabilities like AI Model Scanning, Shadow AI detection and Charlotte AI Agentic Detection Triage. In the second quarter of fiscal 2026, Charlotte AI’s usage grew 85% compared with the prior quarter. The adoption of Charlotte AI is already tied to new customer deals. One such example is a Fortune 500 software company, which signed an eight-figure re-Flex deal to include Charlotte AI as part of its deal to modernize its SOC. The company renewed its contract 18 months before the expiration of the initial Falcon Flex subscription and also replaced a legacy and a hyperscaler SIEM in the process.
CRWD Price Performance & Stock Valuation
In the year-to-date period, shares of CrowdStrike have climbed 46.9%, outperforming the Zacks Security industry and its peers, including Check Point Software ((CHKP - Free Report) ), Palo Alto Networks ((PANW - Free Report) ) and SentinelOne ((S - Free Report) ).
The Zacks Security industry has returned 12.1% year to date. Shares of Palo Alto Networks have returned 2%, while Check Point Software and SentinelOne shares have plunged 1.7% and 28%, respectively.
YTD Price Return Performance
Image Source: Zacks Investment Research
Now, let’s look at the value CrowdStrike offers investors at the current levels. CrowdStrike is trading at a premium with a forward 12-month P/S of 22.41 compared with the industry’s 12, reflecting a stretched valuation.
Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
CrowdStrike stock also trades at a higher P/S multiple compared with other industry peers, including Checkpoint Software, Palo Alto Networks and SentinelOne. At present, Checkpoint Software, Palo Alto Networks and SentinelOne have P/S multiples of 7.04, 11.81 and 4.55, respectively.
Investment Consideration for CrowdStrike
A significant driver of new customer addition is the Falcon Flex subscription model, which simplifies security adoption by offering modular, scalable cybersecurity solutions. CrowdStrike secured major deals in the last reported quarter, including an eight-figure re-Flex agreement with a Fortune 500 software company, showing strong enterprise demand. This shows CrowdStrike’s ability to attract high-value customers, encourages long-term commitments, steady revenue growth and deep customer integration.
However, CrowdStrike’s rising costs are a cause of concern. Over the last six fiscals, CrowdStrike’s Research & Development expenses increased twelvefold, while Sales & Marketing expenses rose nearly ninefold to $1.52 billion in fiscal 2025 from $173 million in fiscal 2019. Though the firm foresees these investments generating benefits over the long run, higher expenses are expected to weigh on the company’s bottom-line results.
Conclusion: Hold CrowdStrike Stock for Now
As businesses continue prioritizing AI-driven cybersecurity solutions, CrowdStrike’s leadership in threat prevention, response and recovery will only strengthen. However, rising costs, shrinking profits and premium valuation warrant a cautious approach to the stock. So, it is prudent for existing investors to remain invested, while new investors should wait for a better entry point.