CrowdStrike Holdings (CRWD)
Ciberseguridad / Software de plataforma
CrowdStrike compounds recurring revenue at 24% annually on a wide-moat platform, but stock-based compensation absorbs 22.5% of revenue: net of that cost, operating cash flow stayed flat near $0.52 billion between fiscal 2024 and fiscal 2026, and owner earnings, already net of maintenance capex, fell from $0.43 to $0.36 billion, while revenue grew 57%. At 84× the price already pays for operating leverage that has not yet reached the shareholder; the estimated return is +7% annually and the verdict is Fairly valued.
- Price
- $182.42
- Intrinsic value (5y, base)
- $259
- Total annual return (5y)
- 7.3%
- Status (nominal)
- Fairly valued
- Margin of safety
- +12%
The essentials
- Annual recurring revenue of $5.51 billion growing 24%, with net dollar retention of 115% and more than 88,000 customer organizations
- Stock-based compensation equals 22.5% of revenue and 76.2% of reported free cash flow: net of that cost, operating cash flow stayed flat near $0.52 billion, and owner earnings, already net of maintenance capex, fell from $0.43 to $0.36 billion between fiscal 2024 and fiscal 2026
- Fiscal 2027 guidance raises net new annual recurring revenue growth to 27.7% at the midpoint and non-GAAP operating income to a range of $1,452.3 to $1,480.3 million
- The July 19, 2024 incident is still costing money: an additional $82.4 million of general expenses in fiscal 2026, plus ongoing securities litigation and inquiries
- At 84× on owner earnings, the estimated return is +7% annually and the verdict is Fairly valued
Intrinsic value — two valuation methods
By both methods, the value today (DCF $211 · Multiples $208) exceeds the market price ($182).
Pillars of the analysis
The verdict — today vs 5 years
Today — fairly valued: at $182 trades ~12.2% below its value discounted to today (~$208); the discount is positive but does not reach the margin of safety we require (≥38%).
At 5 years — En valor: the target price ($259) plus dividends yield between the 4% floor and the 10% average return — a reasonable return, though without the margin of a great investment.
The bridge: the return at 5 years exceeds the risk-free rate (4.5%) — but the discount does not reach the required margin of safety (≥38%). To require a 15% annual return, it would need to be bought at ~$129.
Thesis
The business
A subscription platform with a wide moat, net retention of 115%, and recurring revenue growing 24% annually. The model is capital-light — capex is 6% of revenue — and working capital works in its favor because the subscription is billed in advance. The quality of the business is not in question; what is in question is how much of that value reaches the shareholder.
The valuation
It is valued by a multiple on owner earnings: operating cash flow net of stock-based compensation, minus maintenance capex. Netting it out is mandatory because stock-based compensation equals 22.5% of revenue and 76.2% of reported free cash flow. On that basis, today's entry multiple is 84× and the base case's exit multiple is 25 times, within the 20-30 times band of the enterprise software archetype. The estimated five-year value is $259 per share.
The margin of safety
It trades close to intrinsic value, far from the required margin of safety. Against the price of $182, the base case's estimated return is +7% annually and the verdict is Fairly valued. The adverse scenario returns +7% annually and the favorable one +7%: the range is wide because the value depends almost entirely on a margin expansion that has not yet occurred. The maximum price to demand a 15% annual return is -42%.
What to watch
The disconfirming test is stock-based compensation measured against revenue. It held between 21% and 23% over the last three fiscal years and over the trailing twelve months (it was 23.5% in fiscal 2023), and the entire base-case thesis rests on it falling toward 14% while revenue doubles. If the stock-based expense grows at the pace of revenue, owner cash flow stays where it has been for three years, and the multiple paid today has nowhere to amortize from.
Educational / informational. Does not constitute investment advice.