M Mohan
Private Equity at IncVangal, Former Microsoft Ventures Director
CrowdStrike is extremely expensive on real owner earnings once stock-based compensation is counted. Of $3.9B reported free cash flow over four years, $3.1B was matched by SBC, yet the share count still rose 7.5%. FY26 owner free cash flow was $138M on $4.81B revenue, a 2.9% cash margin, so at a $219B market cap investors pay about 1,590x owner earnings. x.comÂ
CrowdStrike's growth is too slow to justify its valuation. Its forward P/E has climbed to about 190, while stock-based compensation exceeds operating earnings, so reported free cash flow margins do not show what the business actually earns. x.com x.com x.com x.comÂ
CrowdStrike at 45x revenue is even sillier than its valuation back in 2020, when its fundamentals were far stronger: customer count grew 116%, revenue guidance beat the Street and sales and acquisition costs fell. There was a time to own it; that time is not now. x.comÂ
CrowdStrike may distinguish itself from an expensive cybersecurity group by showing more breakneck growth at earnings next month. Fortinet's slowing product revenue exposed how much relentless execution investors had priced into the group's extreme multiples, pulling CrowdStrike down in sympathy. CrowdStrike remains in a higher tier than Fortinet, which itself ranks above SentinelOne. x.com x.comÂ
CrowdStrike at 40x forward sales is hard to take seriously as a best idea into 2027. x.comÂ
CrowdStrike's 45x sales multiple on mid-20% revenue growth only works if multiple expansion continues in perpetuity, which no long holder can count on. x.comÂ
CrowdStrike's re-rating reflects a massively expanded market in which security seats are defined by AI agents rather than employees. The Mythos model announcement and a frontier model going rogue with cyber attacks changed the fundamentals since the stock was at $100. It is very expensive versus its history and peers, and @InvestingVisual notes it trades at 109x forward free cash flow, but that does not mean nothing has changed. x.comÂ
CrowdStrike's valuation of over 50x revenue is completely indefensible. x.comÂ
CrowdStrike is now more overvalued than Cloudflare, trading at 45-50x sales for barely 26% revenue growth, which are mediocre numbers. Cloudflare's drop after its earnings could be the same script for CrowdStrike. x.com x.com x.comÂ
CrowdStrike stands out over Palo Alto Networks for 2026 because it has higher sales and EPS growth and stronger projections, while the two have similar charts. x.comÂ
CrowdStrike is overvalued at roughly 34x sales after rising another 10% on just a $30M revenue beat. Per @wallstengine, Q2 revenue was $1.47B against $1.44B expected, up 26%, with record net new ARR of $333M and raised full-year guidance, yet that modest beat does not justify the valuation. x.comÂ
