CrowdStrike Set to Report Q2 Earnings: Buy, Sell or Hold the Stock?

CrowdStrike Holdings CRWD is scheduled to report its second-quarter fiscal 2027 results on Aug. 26, 2026.

CrowdStrike anticipates revenues between $1.43 billion and $1.44 billion for the second quarter of fiscal 2027. The Zacks Consensus Estimate for CrowdStrike’s fiscal second-quarter revenues is pegged at $1.44 billion, indicating year-over-year growth of 23.2%.

For the fiscal second quarter, the company expects non-GAAP earnings of 29 cents per share. The Zacks Consensus Estimate for CrowdStrike’s fiscal second-quarter earnings is pegged at 29 cents per share, implying a year-over-year increase of 26.1%. The consensus mark for earnings has remained unchanged over the past 30 days.

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CrowdStrike’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 4.7%.

Earnings Whispers for CRWD

Our proven model does not conclusively predict an earnings beat for CrowdStrike this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here.

CrowdStrike has an Earnings ESP of 0.00% and carries a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors Likely to Influence CRWD’s Q2 Results

CrowdStrike’s second-quarter fiscal 2027 results are likely to benefit from the robust demand for its cybersecurity products, given the increasing number of threat incidents across the globe. As a rising number of employees log into the enterprise's network, the vulnerabilities of cyber breaches lead to a greater need for security. These factors are likely to have spurred the demand for CrowdStrike’s products in the fiscal second quarter.

CrowdStrike’s Falcon Flex subscription model is expected to have remained a major growth driver.  In the first quarter of fiscal 2027, CrowdStrike added more than 300 Flex customers and ended the first quarter with over 1,900 customers who have adopted Falcon Flex. Accounts using Falcon Flex now represent nearly $2 billion in ending annual recurring revenues (ARR), up 99% from the year-ago quarter, showing strong adoption across enterprise customers.

Falcon Flex helps customers adopt new modules without long contract steps, which leads to faster platform usage. The model is helping CrowdStrike benefit from platform consolidation. Customers are using Flex to adopt additional offerings such as Next-Gen SIEM, Identity Protection, Cloud Security and AI Detection and Response without negotiating separate contracts. On the back of strong platform adoption, Falcon Flex should remain one of CrowdStrike’s most important growth drivers in the to-be-reported quarter.

In the first quarter of fiscal 2027, CrowdStrike's Next-Gen SIEM surpassed $600 million in ending ARR. During the first quarter, a major fuel retailer selected CrowdStrike to replace a legacy SIEM platform with a next-generation endpoint detection and response solution and software from a network security vendor. This 8-figure new logo win demonstrates how CrowdStrike is using Next-Gen SIEM to consolidate multiple security products onto a single platform. This momentum is likely to have continued in the to-be-reported quarter.

CrowdStrike is expanding its identity security business as more companies deploy AI across their operations. CrowdStrike is addressing this opportunity through Falcon Shield, Falcon Next-Gen Identity and SGNL, which it acquired in the first quarter of fiscal 2027. Falcon Shield’s ending ARR grew nearly four times year over year during the first quarter. During the fiscal first quarter, a large U.S. healthcare company expanded its deployment by purchasing Falcon Next-Gen Identity and SGNL in a seven-figure deal. With more companies deploying AI across their businesses, the need to secure AI identities should continue to increase. Strong momentum in identity security is likely to have boded well for CrowdStrike's prospects in the fiscal second quarter.

CrowdStrike is seeing strong demand for its AI Detection and Response (AIDR) solution. CRWD's AIDR solution is designed to help companies monitor and secure AI applications, AI agents and AI workloads as AI adoption increases across enterprises. Management highlighted AIDR as one of the company's fastest-growing products during the first quarter of fiscal 2027. During the first quarter, an automotive financial services company deployed AIDR across more than 30,000 hosts in a seven-figure deal. As organizations add identity, cloud security, SIEM and AI security to their existing Falcon deployments, CRWD can increase customer spending without relying only on new customer additions. These factors are likely to have boded well for the company's prospects in the to-be-reported quarter.

CRWD Price Performance & Stock Valuation

Over the past year, shares of CrowdStrike have surged 83.3%, outperforming the Zacks Security industry and its peers, including Qualys Inc. QLYS, Okta Inc. OKTA and Check Point Software CHKP.

The Zacks Security industry has appreciated 71.3% over the past year. Shares of Okta and Qualys have jumped 47.9% and 37.3%, respectively, while Check Point Software shares have plunged 30.5%.

One-Year Price Return Performance

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Now, let’s look at the value CrowdStrike offers investors at the current levels. CrowdStrike is trading at a premium with a forward 12-month P/S of 29.36X compared with the industry’s 17.23X, reflecting a stretched valuation. The Zacks Value Score of F also suggests that CRWD stock is overvalued.

Forward 12-Month P/S Ratio

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CrowdStrike stock also trades at a higher P/S multiple compared with other industry peers, including Qualys, Okta and Checkpoint Software. At present, Qualys, Okta and Checkpoint Software have P/S multiples of 8.16X, 6.98X and 4.58X, respectively.

Investment Consideration for CrowdStrike

A significant driver of new customer addition is the Falcon Flex subscription model, which simplifies security adoption by offering modular, scalable cybersecurity solutions. CrowdStrike secured major deals in the last reported quarter, including an eight-figure Next-Gen SIEM deal with a major fuel retailer and a seven-figure AIDR deal with an automotive financial services company, showing strong enterprise demand. This shows CrowdStrike’s ability to attract high-value customers, encourages long-term commitments, steady revenue growth and deep customer integration.

However, CrowdStrike’s rising costs are a cause of concern. Over the last seven fiscal years, CrowdStrike’s Research & Development (R&D) expenses have increased 12-fold, while Sales & Marketing (S&M) expenses have flared up more than 10-fold to $1.83 billion in fiscal 2026 from $173 million in fiscal 2019. Compared with fiscal 2025, S&M and R&D expenses soared 20% and 29%, respectively. Though the firm foresees these investments generating benefits over the long run, higher expenses might weigh on the company’s bottom-line results.

Conclusion: Hold CrowdStrike Stock Right Now

As businesses continue prioritizing AI-driven cybersecurity solutions, CrowdStrike’s leadership in threat prevention, response and recovery will only strengthen. CrowdStrike’s subscription-based model and recurring revenue streams, along with its strong partner base, should provide stability and gradual growth, even amid ongoing macroeconomic challenges and geopolitical issues.

However, rising costs and premium valuation warrant a cautious approach to the stock.

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This article originally published on Zacks Investment Research (zacks.com).

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