Key Takeaways
- CrowdStrike shares fell 10% as investors sold off AI stocks, and the company had no news to explain the drop.
- Palo Alto Networks, Zscaler and Cloudflare fell with it, as the market sold cybersecurity as a group.
- CrowdStrike’s forward P/E sits far above its five-year average, while earnings estimates have barely risen.
- Its Dec. 1 report has to show that AI-driven demand is lasting.
CrowdStrike (CRWD) sank 10% today with no news of its own, as the Nasdaq-100 fell 5% and investors unwound the AI trade. Palo Alto Networks (PANW), Zscaler (ZS) and Cloudflare (NET) sold off with it.
It’s a rough end to a good week for CrowdStrike’s business. On Tuesday, it launched a kill switch for rogue AI agents and agreed to buy two AI-agent security startups, Fiddler and Dreadnode, for about $495 million combined, according to The Wall Street Journal.
Analysts barely raised their numbers
Analysts expect revenue to grow 25% to $6.01 billion in the year ending January 2027, then about 22% to 23% a year after that.
Nothing in today’s drop should move those estimates. But they’ve barely moved all year: consensus EPS for each of the next three fiscal years is up 5% at most over the past year, while the stock ripped 114% in 2026 through Monday.
So investors are paying a lot more for the same earnings. CrowdStrike traded at 171x forward earnings at Wednesday’s close, against a five-year average of 113x.
At today’s price, it’s about 156x.
The demand is real: net new ARR jumped 51% to a record $332.8 million in the quarter ended July 31.
TIKR tracks 53 analysts on CrowdStrike. How many say “Buy”?
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Cheap or pricey, cybersecurity sold off
Palo Alto fell 8% at 84x forward earnings, and it’s shopping for AI-agent security too: The Information reported it’s in talks to buy Clutch Security for about $500 million. Will its Nov. 18 report give investors a reason to look past days like this?
Zscaler fell 9% even though it came into today down about a third over the past year, at 46x forward earnings. The difference is that its multiple has already come down a long way, and CrowdStrike’s hasn’t.
Cloudflare fell 11% at 179x forward earnings, and it reports after today’s close against guidance of $736 million to $737 million of third-quarter revenue.
The selling reached well past software. Bloom Energy (BE) sank 17%, even after NTT DATA announced a 900 MW fuel cell agreement with Bloom this morning.
What I’d watch on Dec. 1
At about 156x forward earnings, CrowdStrike still has a long way to fall to its average if the AI trade keeps unwinding. I wouldn’t call this a buying opportunity yet.
Management guides to $343 million to $347 million of net new ARR for the October quarter. A beat and another full-year raise would help justify the premium. Anything less, and I’d expect the multiple to keep coming down.
So what is CrowdStrike stock actually worth?
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Disclaimer:
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