Crowdstrike Holdings Inc (CRWD)

Conclusion

CrowdStrike sells subscriptions to its Falcon cybersecurity platform, which protects endpoints, cloud workloads, identity and data. On 9 November 2026 the share price was 228.58 USD, giving a market capitalisation of 234.1 billion USD.

The verdict is overvalued. Price-to-free-cash-flow stands at 148.8 against a historical median of 86.5, a premium of 72.1%. Price-to-sales is 43.4 against a median of 22.9, a premium of 89.7%, and price-to-book is 45.9 against a median of 24.8, a premium of 84.7%. The DCF gives 10.73 USD per share. The fair value band runs from 53.80 to 80.70 USD with a midpoint of 67.25 USD, a margin of safety of -70.6% at the current price. The fair value from historical multiples is 123.77 USD. The reverse DCF implied growth is not available because it falls outside the range the model can compute. Revenue grew at a compound rate of 29.0% over three years and 40.6% over five years.

What holds the case up is a net cash position, with net debt to EBITDA at -9.6, an Altman Z-score of 20.98, and revenue growth in all nine comparable years. Free cash flow conversion of 26.9 over the trailing twelve months also supports it. What would break it is the weak return on capital, with ROIC at 9.1% against a WACC of 10.6%, the share count rising at 3.5% a year over five years, and interest coverage of only 3.9. The valuation itself is the largest risk.

Financial health

Financial strength is green, held up by a net cash position, a current ratio of 1.57 and an Altman Z-score of 20.98, while interest coverage of 3.9 is only neutral. The quick ratio is 1.37, net debt to EBITDA is -9.6, which means net cash, and debt to equity is 0.16. The Altman Z-score of 20.98 falls in the safe zone, although the model was designed for manufacturers and CrowdStrike is a software company. Insolvency risk: low, about 1.2% by the estimate of the Ohlson model over one to two years, based on figures as of 31 January 2026. Interest coverage is the weakest of these figures, so it is the one to watch if earnings fall.

Earnings quality

Earnings quality is yellow, because cash generation and the Beneish reading are good, while dilution and a weak Piotroski score pull it down. Free cash flow conversion is 26.9 over the trailing twelve months, and the five-year figure is not available. The accrual ratio is -0.18, which indicates that reported earnings are backed by cash. Stock-based compensation equals 22.8% of revenue, and free cash flow after that compensation is 342.4 million USD. The share count has grown at a compound rate of 3.5% over five years, so there are no net buybacks. The Piotroski score is 4 out of 9, and the Beneish M-score of -3.03 is in the unlikely range. The company beat expectations in 5 of its last 8 quarters, with one miss, and its average surprise was -1.9%. Estimates for the current year were revised down by 1.9% over 90 days, and those for next year by 1.0%.

Profitability

Profitability is yellow, with margins improving against their history but returns on capital still below the cost of capital. The gross margin is 75.3% against a median of 73.4%, and the operating margin is -2.2% against a median of -10.2%. The net margin is 1.1% against a median of -13.4%. ROIC is 9.1% against a WACC of 10.6%, a ROIC minus WACC value of -1.5%. Return on equity is 1.2%. The DuPont split shows a net margin of -3.4%, an asset turnover of 0.43 and an equity multiplier of 2.50, as of 31 January 2026, so leverage is not inflating the return. The five-year median ROIC is -426.3%, which reflects years of operating losses.

Growth

Growth is green, with strong revenue expansion sustained across every comparable year. Revenue has a compound annual growth rate of 29.0% over three years and 40.6% over five years. The ten-year figure is not available. Revenue grew in 9 of 9 comparable years. Free cash flow per share grew at 20.6% a year over three years and 30.4% over five years. Analysts expect next-year earnings growth of 28.1%. Earnings per share growth is not available, because the figure is missing from the data.

Valuation

Valuation is red, because every multiple sits well above its history and the discounted cash flow value and the margin of safety are both deeply negative. Price-to-free-cash-flow is 148.8 against a median of 86.5, a premium of 72.1%. Price-to-sales is 43.4 against a median of 22.9, a premium of 89.7%, and price-to-book is 45.9 against 24.8, a premium of 84.7%. Historical medians for price-to-earnings and EV to EBITDA are not available, and their current values are 4003.6 and 526.2. The DCF gives 10.73 USD per share, using a discount rate of 10.6%, 20% growth in the first stage and 2.5% growth thereafter. Over half of that value, 55.8%, comes from the terminal value. The fair value band runs from 53.80 to 80.70 USD, with a midpoint of 67.25 USD and a margin of safety of -70.6%. The fair value from historical multiples is 123.77 USD. The reverse DCF implied growth is not available because it falls outside the computable range. The company does not pay a dividend. These fair values are order-of-magnitude estimates built on fixed assumptions, not price targets. The tax rate of 21% is also assumed.

Risks

The main risk is that the valuation proves too high relative to the cash the business generates. If growth slows from the 20% assumed in the DCF, the DCF value and fair value band would fall further. A weaker return on capital would matter too: ROIC at 9.1% is below WACC at 10.6%, so growth only creates value if returns rise. Continued dilution, with the share count up 3.5% a year, would reduce the value per share for existing holders. Interest coverage of 3.9 would weaken if operating profit fell, although net cash limits that risk. Some values are not available, including the five-year free cash flow conversion, the ten-year revenue growth, historical medians for price-to-earnings and EV to EBITDA, and the reverse DCF implied growth. The analysis also lacks a debt maturity schedule and revenue by segment, so it cannot judge refinancing risk or which products drive growth.