CrowdStrike Earnings: Widening Platform Continues to Gain Traction; Fair Value Raised

Key Morningstar Metrics for CrowdStrike Holdings

• Fair Value Estimate

  : $460

• Morningstar Rating

  : ★★★

• Morningstar Economic Moat Rating

  : Wide

• Morningstar Uncertainty Rating

  : Very High

What We Thought of CrowdStrike’s Earnings

CrowdStrike closed out fiscal 2026 with strong quarterly results, which included sales growing 23% to $1.3 billion and adjusted operating margins expanding 370 basis points to 25%. The firm’s annual recurring revenue grew 24% to $5.25 billion, with net-new ARR rising 47% to $331 million.

Why it matters: CrowdStrike’s Flex program, a commitment-based spending model in which clients commit to an upfront dollar amount they’ll spend with CrowdStrike and subsequently choose different modules to deploy those dollars, continues to spearhead ARR growth.

• With ARR from Flex customers growing more than 120% to $1.69 billion and more than 380 customers returning to CrowdStrike to “Re-Flex” or increase their dollar commitments, we see this program as a clear sign that customers want to consolidate spending with fewer security vendors.
• The Flex program, despite being conceived before the current market fears of seat-based pricing took hold, also insulates CrowdStrike’s business from seat-based pressures, as the program’s commitments are consumption-based.

The bottom line: We are raising our fair value estimate for CrowdStrike to $460 from $410, upgrading our economic moat to wide from narrow, and increasing our Morningstar Uncertainty Rating to Very High from High. With shares trading flat after hours, we see them as attractive.

• Our moat rating upgrade is driven by our view that CrowdStrike stands to benefit from the adoption of artificial intelligence, and as AI-driven security threats proliferate, the firm should be able to achieve excess returns with near-certainty over the next decade.
• While our confidence in CrowdStrike’s business and its ability to leverage AI to its advantage is high, we’d be remiss not to note the increased uncertainty AI inherently brings to software, with the range of future outcomes widening as AI adoption grows.