Is It Too Late to Buy CrowdStrike Stock After Its 20% Surge?

CrowdStrike (NASDAQ: CRWD) shares surged 20.5% on Aug. 27 after the company saw record new annual recurring revenue (ARR) and posted impressive metrics across the board. ARR is the annualized value of its high- gross-margin subscription contracts and does not include its professional services revenue.

With the share price of the cybersecurity company nearly doubling this year, the question is whether the stock still has room to run. Let's dig into the latest results and prospects to find out.

Impressive growth in the second fiscal quarter

With its strong fiscal Q2 results, CrowdStrike once again demonstrated why it is the premier endpoint security company. The rise of agentic AI is driving greater use of custom agents at endpoints and increasing risks, which in turn has made endpoint security a top spending priority for organizations. When Anthropic released its Mythos model, which could exploit previously unknown software vulnerabilities, demand for advanced AI-powered cybersecurity tools skyrocketed.

Image source: The Motley Fool

This increased demand is benefiting CrowdStrike, which said its endpoint business accelerated for the fourth straight quarter and is also fueling adoption of its next-gen security offerings. Among these offerings, AIDR (Artificial Intelligence Detection and Response) saw its ending ARR nearly triple versus Q1, while Identity and Next-Gen SIEM (Security Information and Event Management) ARR rose 39% to $2.1 billion. Cloud and Runtime Security ARR, meanwhile, jumped 29% to $905 million.

Its Falcon Flex licensing model, which lets customers access its complete cybersecurity product portfolio while deploying and paying for modules only when needed, also continues to be a differentiator. The subscription model saw its ARR double to $2.3 billion. It is seeing a more than 40% lift in ARR when existing customers convert to Flex, and a 53% increase when customers reFlex following their initial subscription. New customers are also starting off with Falcon Flex, accounting for 34% of its new Flex ARR.

Overall, CrowdStrike saw its revenue climb 26% year over year to $1.47 billion, with subscription revenue rising 27% to $1.4 billion. Total ARR increased 25% to $5.84 billion, with new ARR hitting a record of $332.8 million, up 51% year over year. CrowdStrike's adjusted earnings per share (EPS) soared 35% to $0.31. The results were ahead of the consensus for adjusted EPS of $0.29 on revenue of $1.44 billion.

Looking ahead, CrowdStrike raised its fiscal 2026 revenue guidance to between $5.99 billion and $6 billion from an earlier outlook of between $5.91 billion and $5.96 billion. It also increased its adjusted EPS guidance to a range of $1.25 to $1.26, up from a previous forecast of between $1.22 and $1.24 (adjusting for a 4-for-1 stock split).

For its fiscal third quarter, the company forecasted adjusted EPS of $0.31 on revenue of $1.52 billion to $1.53 billion. That was essentially in line with the consensus.

Is CrowdStrike stock still a buy after its huge run?

CrowdStrike delivered a very strong quarter, highlighted by exceptional new ARR growth. The company is seeing strong adoption of next-gen solutions across its cybersecurity portfolio, while its Falcon Flex flexible payment program continues to be a strong driver, helping it cross-sell new modules. With AI creating more cyber threats, CrowdStrike is well-positioned to continue seeing strong growth well into the future as the leader in endpoint security.

The biggest knock on the stock, though, is valuation. CrowdStrike shares trade at a forward price-to-sales (P/S) multiple of about 30 times analysts' estimates for the next fiscal year (ending January 2028). Given its overall mid-20% revenue and ARR growth, that's just a huge multiple.

As such, while I like the company and the opportunity ahead, I would not chase the stock here.

Geoffrey Seiler 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.