DON7SPY
Industrial Engineer, MBA Finance, Data/Supply-Chain Background, Options Analysis
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 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 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 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'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
Cloudflare and CrowdStrike valuations are in la-la land. Per a SergeyCYW comparison of growth per unit of EV/sales, Cloudflare trades at 34x sales and CrowdStrike at 30x. x.comÂ
CrowdStrike is where the AI buildout ends, because rising AI demand expands the addressable market for security. Management said that since Anthropic's Mythos, growth has shown up in ARR, not just meetings or interest, and the threat landscape is not subsiding. The stock's move higher is a rerating: CrowdStrike can grow faster as it gets bigger, with no end in sight in an AI world, though the share price could wobble. x.com x.comÂ
CrowdStrike at 30x sales for a $170 billion software company is hard to see ending well. x.comÂ