Jonah Lupton
CEO & CIO of FirstWave Capital, Long-Biased Growth
CrowdStrike's multiple looks insane, while SK hynix is far cheaper with heavy buybacks ahead. CrowdStrike trades at 36x next-twelve-month revenue and 119x free cash flow, with 22% expected revenue growth. Even at an unlikely 40% annual growth from about $6 billion in FY2027 and FCF margins rising to 40%, it would trade at 40x FY2030 free cash flow. SK hynix sits at 3x 2027 EPS and should buy back 50% or more of its shares over 3-5 years. x.com x.com x.com
CrowdStrike is a great company but impossible to own at its valuation. It trades at 31 times forward revenue with only about 26% revenue growth, and around 100 times fiscal 2028 free cash flow growing 30–35%, while stock compensation consumes about two-thirds of that free cash flow. Revenues and margins would need to double to justify the multiple, which will not happen. x.com x.com
CrowdStrike and Palo Alto Networks need 50%-plus growth to deliver even a 10% IRR over a realistic horizon, but almost no conceivable case gets them there. They feel as dumb as Zoom and Peloton in 2021. Even if revenue doubles over four to five years, Palo Alto would still trade at 10x revenue and CrowdStrike at 20x, leaving little prospect of a real IRR; Palo Alto is growing in the teens today. x.com x.com x.com
CrowdStrike at 40x forward sales is hard to take seriously as a best idea into 2027. x.com
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.com
SentinelOne appears undervalued relative to its expected revenue growth. Analysts forecast 19.2% NTM revenue growth, versus 23.2% for CrowdStrike, which trades at a premium on forward EV/sales. x.com
CrowdStrike is a hard pass at its current valuation, priced for perfection and then some for just 26% growth on an already large revenue base. It trades at 35x forward revenue, 102x forward free cash flow, 113x forward EV/EBITDA and 166x forward earnings. x.com
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.com
Combining estimated NTM revenue growth with trailing GAAP EBITDA margin makes Palo Alto Networks, Datadog, JFrog, Rubrik and Snowflake look overvalued against forward EV/sales. Zoom, Alphabet, Oracle, AppLovin, Microsoft, Fair Isaac, Adobe, Amazon and Teradata remain undervalued on this Rule of 40 comparison; Palantir, Cloudflare and CrowdStrike remain overvalued. x.com
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.com
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.com
SK hynix's earnings and buybacks could drive a tripling by 2027 before a re-rating, on Jonah Lupton's assumptions. Its Q3 report expects memory demand to outpace supply through 2030 as advanced processes and fab lead times constrain growth. It plans about KRW 100 trillion in FY2026 shareholder returns, including KRW 60 trillion or more in share acquisitions or cancellations; the buybacks would first reduce shares outstanding. x.com x.com x.com x.com x.com x.com
