CrowdStrike Just Completed a Stock Split. Is the Stock a Buy Now?

CrowdStrike Holdings (NASDAQ: CRWD) has been a winner for investors in recent years -- over the past three, it's soared more than 400%. This is as the cybersecurity giant has increased revenue and benefited from renewed interest in keeping systems, networks, and data safe. In a world where artificial intelligence (AI) is more regularly used, threats are multiplying, and customers are turning to CrowdStrike for protection.

The company also demonstrated its strength and the fidelity of its customers by facing an enormous challenge two years ago -- the world's biggest information technology outage -- and going on to grow. CrowdStrike recently announced record new annual recurring revenue and record free cash flow.

So it's no surprise that CrowdStrike stock continued its gains into this year and now is up 69% for 2026. With a stock price trading at more than $700 just a few months ago, the company announced a stock split -- a move to bring down the per-share price -- and completed the operation at the start of this month.

At the new, lower price, is CrowdStrike a buy? Let's find out.

Image source: Getty Images.

What's a stock split?

First, a quick note about stock splits. While they do bring the per-share price down, they don't alter the total value of the company or anything fundamental. The purpose is to make a particular stock more accessible to a wider range of investors -- those who may not have several hundred dollars or a thousand dollars to invest. Fractional shares exist, but they aren't available at every brokerage, so they may not be an option for some investors.

A stock split involves offering more shares of a particular stock to current shareholders. This brings down the value of each share, but the value of the shareholder's entire holding remains the same. The change in the price depends on the ratio of the split.

CrowdStrike completed a 4-for-1 split on July 2, bringing the stock down to about $190.

Since stock splits don't change fundamentals, they don't actually make a stock cheaper in terms of valuation -- so if you consider a stock pricey right before such a move, it will continue to be pricey after the operation.

Stock splits and performance

All of this means that, though stock splits may make it easier to get in on a certain stock, they aren't a reason to buy -- and therefore, they don't have any real impact on stock performance. That said, when management decides on a split, it suggests confidence about the future, with the idea that the stock may go on to gain again from its new lower price. So we might see this as positive as long as the rest of the picture is bright.

CrowdStrike's one big weakness is that the stock is expensive, trading at 161x forward earnings estimates. But in certain cases, when considering high-growth tech stocks, it may be worth looking beyond valuation: These metrics don't measure growth a few years down the road, and this could change the whole picture.

A key transition point for CrowdStrike

CrowdStrike is a particularly good example of this because the company may be in the early stages of its growth. Today, the cybersecurity market has reached a period of transition, as I mentioned briefly above. The proliferation of AI is fantastic in many ways, but one negative aspect is that it's leading to additional cybersecurity threats.

A low single-digit percent of organizations have a significant cybersecurity strategy right now, according to CrowdStrike. This opens up an enormous growth opportunity for the cybersecurity giant.

Meanwhile, CrowdStrike also benefits from AI as it incorporates the technology in its Falcon cybersecurity system, so that it can better anticipate threats and offer a solution that's perfectly adapted to each customer's needs. Falcon offers many modules, each specializing in a certain area, and module adoption rates have been strong. For example, the adoption rate for six or more modules climbed to 51% in the latest quarter.

So, is CrowdStrike a buy now? If you're a value investor, the pricey nature of this stock means it's not the right choice for you. But if you're a growth investor who doesn't mind looking a few years down the road to revenue growth potential, CrowdStrike is a great stock to buy and hold.

Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends CrowdStrike. The Motley Fool has a disclosure policy.