CrowdStrike (CRWD) Stock Declines 22% as Investors Brace for Earnings

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TLDR

  • Shares of CrowdStrike have fallen 22% from their peak, now at $388.20
  • The company reports Q4 fiscal 2026 results on March 3, with projected revenue of approximately $1.3 billion
  • Falcon Flex ARR reached $1.35 billion in Q3, marking a 200% increase from the previous year
  • Barclays reduced its price target from $610 to $550, while maintaining an Overweight rating
  • CRWD’s revenue multiple stands at 23.4x, significantly higher than competitor Palo Alto Networks’ 12.3x

CrowdStrike (CRWD) has declined 22% from its record peak, trading at $388.20 as of February 20. With earnings scheduled for March 3, investors are evaluating whether the decline represents a buying opportunity or signals valuation concerns.

CRWD Stock Card

The company’s Falcon platform continues to deliver robust performance. For Q3 fiscal 2026, which ended October 31, CrowdStrike reported $1.23 billion in revenue, representing a 22% increase from the prior year. This represented the second consecutive quarter of growth acceleration.

Management has guided for Q4 revenue of approximately $1.3 billion, which would drive full-year fiscal 2026 revenue to a record $4.8 billion.

Falcon Flex, the adaptable subscription offering introduced in 2023, has emerged as a key performer. It produced $1.35 billion in annual recurring revenue during Q3, a 200% year-over-year increase. Customers evidently appreciate the flexibility to add or remove modules without contract renegotiations.

CrowdStrike Focuses on AI-Driven Threats

In August 2024, the company introduced Falcon Next-Gen Identity Security to tackle risks posed by AI agents. These agents frequently operate without dedicated credentials, generating security vulnerabilities that malicious actors can exploit.

The solution employs a “zero standing privileges” approach, removing access to critical systems when no longer required — applicable to both human and digital identities.

CrowdStrike has established a long-range goal of achieving $20 billion in ARR by fiscal 2036, anticipating that agentic AI will fuel increased demand for cybersecurity solutions.

Valuation Remains a Concern

Despite the 22% decline, CRWD maintains a revenue multiple of 23.4x. This is nearly twice that of its nearest competitor, Palo Alto Networks, which trades at 12.3x revenue.

Barclays lowered its price target on February 20 from $610 to $550, while retaining an Overweight rating. The firm is forecasting $300 million in net new ARR for Q4, with a potential upside of $330 million.

The company’s market capitalization currently stands at $98 billion. The stock’s 52-week trading range spans from $298 to $566.90.

For near-term investors, the elevated valuation remains difficult to justify even amid potentially solid Q4 results. For those with a longer-term perspective, the March 3 earnings report will serve as the next critical data point.