CrowdStrike is accelerating, but $265 treats $7.7 billion of October 2027 ARR as worth 35 times. I use 28 times and a $213 target.
Key points
- $5.84 billion ending ARR on July 31, 2026, up 25 percent year over year, with $333 million net new ARR in the quarter.
- $6.61 billion fiscal 2027 ARR guidance midpoint, implying 34 percent net-new growth, versus 22 percent at the year start.
- 46 times last reported ARR is what $265.36 capitalizes today; I apply 28 times to $7.7 billion of October 2027 ARR.
The call
The price requires CrowdStrike to keep growing ARR near 25 percent and to keep a 35 times multiple on that larger base. That is too optimistic given stock compensation near $1.5 billion a year, GAAP operating losses, and 10-year yields above 5 percent.
I believe ARR reaches about $7.7 billion in twelve months and the multiple compresses to 28 times as growth normalizes from the Flex surge. Cash of $5.0 billion and $0.75 billion of 2029 notes leave equity near $221 billion, or $213 a share.
Ending ARR and net new ARR ($ billions)- Ending ARR reported
- My ending ARR
Company filings and August 26 2026 guidance; E is my forecast
Valuation
| Item | Figure |
|---|
| October 2027E ending ARR | $7.7 billion |
| Enterprise value at 28 times ARR | $216 billion |
| Plus cash, minus debt, twelve months out | $5.8 billion |
| Equity value | $221 billion |
| Diluted shares | 1.04 billion |
| Twelve-month target | $213 a share |
Software platforms that grow 20 to 25 percent with 30 percent free-cash-flow margins have rarely held 35 times forward ARR once rates stayed high. Downside if Flex utilization disappoints is larger than upside if the 34 percent net-new guide holds, which is why the rating is sell not hold.
What $265 requires versus my twelve-month caseEnterprise value to ending ARR; October 2026 price versus October 2027E
Risks
- Net new ARR stays above $350 million a quarter through fiscal 2028, justifying a higher multiple.
- Microsoft or Palo Alto bundling cuts Falcon win rates; watch module mix and new-logo ARR.
- Outage litigation or remaining regulatory requests produce a material reserve.
What would change my mind
Four consecutive quarters of net new ARR above $380 million with disclosed net retention at or above 115 percent.