CrowdStrike Stock Rises 29% in 3 Months: Time to Hold or Book Profits?

CrowdStrike Holdings (CRWD) shares have soared 29.1% in three months, outperforming the Zacks Security industry’s 17.5% growth. The stock has also outperformed the returns of other industry peers, including SentinelOne (S), Zscaler (ZS) and Check Point Software (CHKP). In the past three months, shares of SentinelOne, Zscaler and Check Point Software have gained 0.5%, 19.3% and 8%, respectively. CrowdStrike has been riding on strong enterprise demand for artificial intelligence (AI)-native cybersecurity solutions. But with the stock outperforming the industry and peers, the question arises: Does it still have room to run, or is it time for investors to consider taking profits? Let’s find out.3 Month Price Return PerformanceImage Source: Zacks Investment ResearchFalcon Flex Adoption Aids CrowdStrike’s Subscription GainsCrowdStrike’s subscription business model is driving its overall top-line performance. The company’s revenues crossed the $1 billion mark for the fourth consecutive time during the second quarter of fiscal 2026 and marked a year-over-year improvement of nearly 20.1%. This was partly achieved due to the strong adoption of the Falcon Flex Subscription Model, which allows customers to commit upfront and later choose modules, eliminating procurement friction.CrowdStrike’s subscription customers, who adopted six or more cloud modules, represented 48% of the total subscription customers at the end of the second quarter. Those with seven or more cloud modules accounted for 33%, and those with eight or more cloud modules represented 23% as of July 31, 2025.During the second quarter, the company added $221 million in net new annual recurring revenue (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 over 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%.Falcon Flex makes it easier for customers to adopt multiple modules across CrowdStrike’s platform. Many are also using Flex to replace several legacy tools, choosing to consolidate around CrowdStrike. One such example during the second quarter is where a Fortune 500 software firm signed an eight-figure re-Flex deal to modernize its security operations center, renewing its contract 18 months before the expiration of the initial Falcon Flex subscription. In the second quarter, CrowdStrike’s sales and non-GAAP EPS grew 21% and 5.7%, respectively, year over year. Looking ahead, management expects at least 40% year-over-year growth in net new ARR in the second half of fiscal 2026, where Falcon Flex can play a key role in helping the company reach its long-term goal of $10 billion ARR. CrowdStrike’s Next-Gen SIEM Drives Growth MomentumCrowdStrike 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’s ARR grew more than 95% year over year, reaching over $430 million. 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.To strengthen SIEM further, CrowdStrike recently agreed to acquire Onum, a data pipeline platform. Onum is designed to speed up data processing, cut storage costs, and enable faster detection. Through Onum, CrowdStrike aims to strengthen its Falcon Next-Gen SIEM to give its customers better control of their data while reducing response times.The above factors show how the solution is gaining robust traction, as testified by its 95% year-over-year ARR growth in the second quarter of fiscal 2026. This was way higher than the company’s overall second-quarter ARR growth of 20%. The Zacks Consensus Estimate for CrowdStrike’s fiscal 2026 and 2027 revenues indicates a year-over-year increase of around 27.8% and 21.3%, respectively.Image Source: Zacks Investment ResearchCrowdStrike Trades at a Premium ValuationCrowdStrike is currently trading at a high price-to-sales (P/S) multiple, far above the Zacks Security industry. CrowdStrike’s forward 12-month P/S ratio sits at 25.11X, significantly higher than the Zacks Security industry’s forward 12-month P/S ratio of 13.66X.Forward 12 Month P/S RatioImage Source: Zacks Investment ResearchCRWD stock also trades at a higher P/S multiple compared with other industry peers, including SentinelOne, Zscaler and Check Point Software. At present, SentinelOne, Zscaler and Check Point Software have P/S multiples of 4.94X, 15.08X and 7.74X, respectively.Conclusion: Hold CrowdStrike Stock NowAs businesses continue prioritizing AI-driven cybersecurity solutions, CrowdStrike’s leadership in threat prevention, response and recovery will only strengthen. The company’s subscription-based model and recurring revenue streams should provide stability and gradual growth, even amid ongoing macroeconomic challenges and geopolitical issues. However, the company’s premium valuation warrants 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.CrowdStrike currently has a Zacks Rank #3 (Hold). 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(ZS): 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