CRWD Stock: Buy the Dip or Beware the Valuation?

Is the worst over for CrowdStrike Holdings Inc. (NASDAQ: CRWD)? That’s what many investors had to have been hoping for when CRWD stock moved up 4.4% in the five days ending Feb. 13. The stock is still down about 8% in 2026, and the setup for the company’s March 3 earnings report is coming into focus.

Specifically, investors will be weighing two competing forces on CRWD stock. The company continues to increase its annual recurring revenue (ARR) as it adds customers to its Falcon platform, while also showing that many customers continue to use multiple modules within the platform.

Those factors support a higher stock price. However, there’s another side to the CrowdStrike story. That is that after a strong run following the well-publicized July 2025 outage, CRWD stock is simply too expensive.

Many investors thought a strong earnings report for fiscal Q3 2026 would have been enough to justify the premium valuation. But that hasn’t been the case. Will the company’s upcoming report be any different?

Understanding CrowdStrike’s Post-Outage Recovery

It may seem like old news to bring up the July 2024 outage that impacted CrowdStrike’s global enterprise clients. However, as is often the case with events like this, the company’s response is more significant than the event itself.

In this case, CrowdStrike offered customers an opportunity to use some of its Falcon modules at no cost as a goodwill gesture. That was critical in mitigating customer churn. But it did more than that. It helped the company increase its customer count.

Since the trough of the post-outage sell-off, CRWD stock is up more than 95%. This is creating tension among investors who may believe in the long-term bull case for cybersecurity but are concerned about valuations that require perfect execution.

Is CrowdStrike’s Growth Fully Priced In?

Offsetting the “outage fatigue” narrative is the reality on the ground. That is that many of CrowdStrike’s customers or potential customers are looking to consolidate their technology stacks to maintain discipline in their IT budgets.

That plays well with CrowdStrike’s Falcon platform, which operates as a hub-and-spoke model built on artificial intelligence (AI) and provides customers with a unified platform for endpoint, identity, and cloud security.

Imitation is the sincerest form of flattery. And that’s where some of the concern may come from. For example, Palo Alto Networks Inc. (NASDAQ: PANW) has adopted a platformization strategy, as has SentinelOne Inc. (NYSE: S). CrowdStrike also faces a threat from companies like Microsoft Corp. (NASDAQ: MSFT) that offer their own cross-platform security suite.

The counterpoint is that CrowdStrike appears to be holding its own. In fact, in its most recent earnings report, CrowdStrike reported that 49% of its customers use six or more of the Falcon’s 32 modules with low churn. That means growing ARR. In its last quarter, CrowdStrike announced a 23% year-over-year (YOY) gain in ARR at $4.92 billion.

Analysts Remain Cautiously Bullish

The overall analyst sentiment for CrowdStrike is bullish. The CrowdStrike analyst forecasts on MarketBeat show 50 analysts rate CRWD stock a consensus Moderate Buy, with a price target of $551.13. That’s an attractive 29% upside for investors.

However, in February, several analysts lowered their price targets for CRWD stock. And in at least two instances, the new price target is well below the consensus target.

That may be due to the selloff impacting software stocks of all types. This adds another brick to the wall of worry that the CRWD stock bulls will have to climb heading into earnings.

CRWD Stock Continues to Seek Direction Before Earnings

On the one hand, investors can cheer the fact that the bulls jumped in when CRWD stock flashed an oversold signal in February. That helps add fuel to the argument that institutional investors may be trying to find a floor for CRWD stock. On the other hand, the stock recently flashed a death cross signal with the 50-day simple moving average (SMA) crossing below the 200-day SMA.

However, it’s fair to ask how much upside there is in the short term. Since the sell-off started, momentum has been firmly with the sellers. The MACD line has struggled to build momentum, and the bulls have been unable to recapture the 50-day SMA since the stock’s slide began in November.

Will Proving It Be Enough?

It’s easy to call CrowdStrike’s upcoming report a prove-it moment. But the report is not likely to resolve valuation concerns or sector sentiment. However, for investors holding CRWD stock for the long term, the key information will be evidence of continued platform consolidation and growing ARR.

If those pieces are in place, an accumulation strategy on weakness may be the right approach while accepting the current volatility as the price of exposure to a category leader.

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The article "CRWD Stock: Buy the Dip or Beware the Valuation?" first appeared on MarketBeat.