CrowdStrike's Pre-Q2 Earnings Analysis: Hold or Fold the Stock?

CrowdStrike CRWD is scheduled to report its second-quarter fiscal 2026 results on Aug. 27, 2025.CrowdStrike anticipates revenues between $1.14 billion and $1.15 billion for the second quarter of fiscal 2026. The Zacks Consensus Estimate for CrowdStrike’s fiscal second-quarter revenues is pegged at $1.15 billion, indicating year-over-year growth of 19.2%.For the fiscal second quarter, the company expects non-GAAP earnings per share between 82 cents and 84 cents. The Zacks Consensus Estimate for CrowdStrike’s fiscal second-quarter earnings is pegged at 83 cents per share, indicating a year-over-year decline of 20.2%. 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 13.2%.CrowdStrike Price and EPS Surprise CrowdStrike price-eps-surprise | CrowdStrike QuoteEarnings Whispers for CRWDOur 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 Q2 ResultsCrowdStrike’s second-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 second quarter. CrowdStrike’s Falcon Flex subscription model is expected to remain a major growth driver. During the first quarter of fiscal 2026, CrowdStrike added $774 million of total Falcon Flex account value, bringing the total deal value of accounts that have adopted Falcon Flex to $3.2 billion. This represents a robust growth of 31% sequentially and more than six times year over year. At the end of the first quarter, more than 820 customer accounts have adopted the Falcon Flex model. CrowdStrike’s robust pipeline of deals indicates that the company is ideally positioned to capitalize on this opportunity.CrowdStrike’s partnership with Amazon Web Services (“AWS”) is a bright spot, enabling the company to gain from the availability of its products on the AWS platform. In July 2025, CrowdStrike expanded its offerings through a deeper partnership with AWS. It launched falcon-mcp  and AI Red Team Services in the AWS Marketplace. Using these services, organizations can test and strengthen their GenAI systems and securely build agentic workflows and gain visibility into detections, incidents, threat intelligence, and behavioral analytics. This is expected to increase in co-selling opportunities with AWS, expanding the volume of transactions through Amazon’s AWS Marketplace. The uptake of AWS service integrations is likely to have contributed to CrowdStrike’s earnings in the to-be-reported quarter.CrowdStrike has enhanced AI-based capabilities like AI Model Scanning, Shadow AI detection and Charlotte AI Agentic Detection Triage. Additionally, CrowdStrike expanded Charlotte AI’s detection triage in the first quarter, which now enables Charlotte AI to deliver autonomous expert-level triage, reasoning and response at machine speed. Additionally, Charlotte AI, combined with Falcon Exposure Management, now delivers AI-powered network scanning for managed and unmanaged devices, driving automation in vulnerability management. These innovations are likely to have helped the company gain more customers during the to-be-reported quarter.CRWD Price Performance & Stock ValuationIn the year-to-date period, shares of CrowdStrike have climbed 21.1%, outperforming the Zacks Security industry and its peers, including Check Point Software CHKP, Palo Alto Networks PANW and SentinelOne S.The Zacks Security industry has returned 8.2% year to date. Shares of Check Point Software and Palo Alto Networks have returned 0.9% and 0.4%, respectively, while SentinelOne shares have plunged 25.1%.YTD Price Return PerformanceImage Source: Zacks Investment ResearchNow, 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 19.54X compared with the industry’s 12.02X, reflecting a stretched valuation.Forward 12-Month P/S RatioImage Source: Zacks Investment ResearchCrowdStrike stock also trades at a higher P/S multiple compared with other industry peers, including CyberArk, Palo Alto Networks and SentinelOne. At present, CyberArk, Palo Alto Networks and SentinelOne have P/S multiples of 14.62X, 11.70X and 5.03X, respectively.Investment Consideration for CrowdStrikeA 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 a 9-figure re-Flex agreement with a Fortune 100 technology company and an 8-figure Falcon Flex expansion with a global healthcare provider, 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 key concern. Over the last six fiscals, CrowdStrike’s Research & Development (R&D) expenses increased 12-fold, while Sales & Marketing (S&M) expenses have increased nearly ninefold to $1.52 billion in fiscal 2025 from $173 million in fiscal 2019. Though the firm foresees these investments to generate benefits over the long run, higher expenses are expected to weigh on the company’s bottom-line results.Conclusion: Hold CrowdStrike Stock for NowAs 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.One Big Gain, Every Trading DayTo help you take full advantage of this market, you’re invited to access every stock recommendation in all our private portfolios - for just $1.Zacks private portfolio services that closed 256 double and triple-digit winners in 2024 alone. That’s about one big gain every day the market was open. Of course, not all our picks are winners, but members have seen recent gains as high as +627% +1,340%, and +1,708%.Imagine how much you could profit with a steady stream of real-time picks from all our services that cover a number of strategies to suit a variety of investing and trading styles.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Check Point Software Technologies Ltd. (CHKP): Free Stock Analysis Report SentinelOne, Inc. (S): Free Stock Analysis Report Palo Alto Networks, Inc. (PANW): Free Stock Analysis Report CrowdStrike (CRWD): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks