CrowdStrike (CRWD): fair value

Fair-value band

The normal range for this name runs from $85 (cheap) to $207 (expensive); it is now priced at $228.

That is 2.0σ above this name's own normal premium.

Standing premium not backed by fundamentals: nothing in this company's health score has changed to earn the rating the market normally gives it.

Is CrowdStrike undervalued?

Expensive, relative to its own history. CrowdStrike trades at $228, 96% above the fair value this model estimates, but it has habitually traded 26% above fair value, and today's gap is 2.0σ above that norm, wider than the range it normally trades in, so the verdict is Expensive: priced further above its own norm than usual, not just above the model's fair value. The health score behind that pricing hasn't moved to earn it, though: read Expensive here as “priced the way this name normally is”, not as a claim the price is justified.

Diligence checklist

4 pass · 3 fail · 4 no data

• PASSCash actually collected from profit, last 12 months: 1248%XBRL · CrowdStrike gets $12.48 of real cash for every $1 of reported profit which means profits are real and not just numbers on paper. That's a good sign. 1 of the last 3 years was loss-making and can't be scored on this ratio at all: dividing cash flow by a loss says nothing about earnings quality.
• FAILGap between paper profit and real cash: -18.5%XBRL · CrowdStrike collected more cash than it booked as profit, by 18.5% of everything it owns. That is the conservative direction, but it is far enough past my 5% line to flag: a gap this wide usually means something large and non-cash is running through the earnings, and I want to know what it is before I trust the profit figure.
• PASSDebt compared to one year of cash earnings: -47.03xXBRL · CrowdStrike holds more cash than debt, so there is no leverage question to answer here. A balance sheet in this shape can fund a bad year out of its own pocket instead of asking a lender for permission.
• FAILHow much more it earns on capital than that capital costs: -15.08ppXBRL (dealbreaker) · CrowdStrike earns 15.1 points LESS on the capital it employs than that capital costs. Every dollar reinvested here destroys value instead of creating it, which turns growth into a reason to worry rather than a reason to own the business. It has been below its cost of capital for 16 straight quarters, which is 4.0 years. That is capital destruction rather than a cheap stock, and it is where I stop work. The gap is wider than it was at the start of the window.
• FAILStock sold by executives and directors on the open market, last 6 months: $81.1MEDGAR (dealbreaker) · Sentonas Michael sold $19.9M of stock in the last 6 months, outside any pre-planned selling schedule, and $81.1M went out that way in total. My rulebook says more than $5 million of this kind of selling is disqualifying for a "long" position (buying the stock). The full list of open-market sellers: Sentonas Michael $19.9M, Podbere Burt W. $16.2M, Oleary Denis $15.9M. A further $573.7M went out under pre-planned 10b5-1 schedules, which I don't count: those sales are set up months ahead and say nothing about what management thinks today. Options being exercised, and shares held back to cover the tax on them, are not sales and I don't count them either. filing ↗
• N/AHow long the CEO has run this company: n/aTEXT · I couldn't establish when CrowdStrike's current chief executive took the job: no appointment appears in the 8-K item 5.02 history.
• N/AProfit margin held up during the last sales slump: n/aXBRL · There's no revenue downturn in CrowdStrike's filed record, or gross profit isn't tagged, so this test has nothing to measure. It needs a bad patch to look at: without one, whether customers would stay through a price rise is untested rather than proven.
• PASSNormal profit margin across a full business cycle: FCF margin 30.3% vs 32.4% medianXBRL · CrowdStrike's current cash margin (30.3%) sits a little below its long-run average (32.4%). My valuation grows the average, so a soft patch doesn't get written into the value as if it were permanent. Across the window the margin ran between 26.1% in July 2025 and 35.1% in October 2021.
• N/AHow much of the stock trades on an average day: $2,672MMARKET · CrowdStrike trades so much volume that this basically isn't a concern. There's no pass or fail here because the answer depends on how big a position I'd actually want to take.
• N/AShare of revenue from its single biggest customer: not establishedTEXT · I fetched and read CrowdStrike's March 5, 2026 10-K but found no sentence about customer concentration. That isn't the same as the filing saying there is none: it may simply be worded in a way my search doesn't catch. Read Item 1 and the concentration-of-risk note yourself before trusting this row. filing ↗
• PASSWhether the company switched auditors in the last 2 years: noneEDGAR · Companies sometimes switch accounting auditors right before something bad is uncovered which can be a warning sign. CrowdStrike hasn't changed auditors in the last 2 years, so there's no such red flag here.