CrowdStrike's growth is accelerating, but at about 45 times sales the stock needs near-perfect execution. I value it at $239.50 a share in twelve months, 10% below the price.
Key points
- 45 times enterprise value to fiscal 2027 revenue, with free cash flow yield near 0.7%.
- $332.8 million of net new annual recurring revenue (ARR) in the July quarter, up about 51% from a year earlier.
- $239.50 a share target, 10% below the $265.36 price.
Value per share by revenue multiple ($)Analyst arithmetic on year-ahead revenue of $8.8 billion; price $265.36 on Oct 7, 2026
The call
The price requires growth to stay near 25% for years while the multiple holds. A $265 share on year-ahead revenue needs about $9.8 billion at 28 times sales, versus my $8.8 billion.
I believe the business is excellent and the market is too optimistic. Revenue growth was 25.8% in the July quarter, and guidance implies $6.0 billion for fiscal 2027. But the stock rose 149% in six months, and part of the ARR strength comes from Flex, a flexible-spend contract that can renew smaller if customers underuse it.
Valuation
| Item | Figure |
|---|
| Fiscal 2027 revenue (company guidance) | $6.0 billion |
| Fiscal 2028 and 2029 growth (my estimate) | 25% and 23% |
| Year-ahead revenue in October 2027 | $8.8 billion |
| Multiple on revenue | 28 times |
| Net cash added | $5.25 billion |
| Target per share (1.05 billion shares) | $239.50 |
28 times is high for software, but justified by 25% growth and a 30% free cash flow margin. At 34 times the value is $290, at 22 times $189. The spread is roughly symmetric, so the price sits above my central case. That means a sell.
Risks
- Growth stays above 30% and the multiple holds, so the stock rises. Watch net new ARR in the October quarter report.
- Flex renewals shrink or retention slips. Watch gross retention and Flex cohort ARR disclosures.
- Outage litigation and the GAAP loss persist. Watch the 10-Q legal note and stock compensation, $0.38 billion last quarter.
What would change my mind
Net new ARR growth above 35% for two more quarters with GAAP operating profit turning positive would justify a higher multiple.