Is CrowdStrike Holdings Stock a Buy Now?

Anyone familiar CrowdStrikehis (CRWD 0.08%) The stock likely knows about the global IT outage the company was directly involved in this summer. A flawed security software update provided by CrowdStrike has temporarily disabled millions of Windows computers and other connected systems around the world. It was a fiasco that gave the company a lot of bad publicity.

Before this misstep, CrowdStrike was arguably the leading next-generation cybersecurity company—at least, investors treated the stock as such. The stock traded at a valuation that was among the highest in the market. CrowdStrike stock is now trading 37% below its peak, and it’s only natural to wonder: Has Wall Street overreacted? The company recently presented its fiscal Q2 2025 report — its first since the IT disruption — and the financial impact it attributed to the event was surprisingly small.

So, should investors take this continued decline as a buying opportunity, or should they assume that CrowdStrike isn’t out of the woods yet?

Assessing the impact of short-term disruption

Those hoping for an epic CrowdStrike business collapse due to the outage were sorely disappointed when the company dropped its fiscal Q2 2025 report. The outage came about a week before the end of the quarter, so many eyes were on on CrowdStrike’s Q3 revenue guidance to understand its impact. The report came in at the end of August, so management had about a month to assess how it was affecting the sales pipeline.

Management cut its full-year sales guidance to a range of $3.89 billion to $3.902 billion. That was a 2.6% drop from previous guidance for revenue between $3.976 billion and $4.01 billion. CrowdStrike posted sales of $3.06 billion in fiscal 2024, so the updated guidance still calls for about 27% growth (at the midpoint).

Analysts agree. Their revenue estimates for this year and next have fallen only slightly.

CRWD Revenue Estimates for Current Fiscal Year Data by YCharts.

At least for now, the outage doesn’t appear to dramatically change the conversation about CrowdStrike’s place as a leading cybersecurity provider.

Is CrowdStrike clear?

Cybersecurity is an essential piece of software for corporations, and switching vendors isn’t as simple as pressing a few keys or flipping a switch. In addition, enterprise software is generally purchased through extended contracts. Switching to a new vendor and implementing new software takes time. As such, the damage the IT outage has done to CrowdStrike’s finances is likely to show in a slow trickle.

Among the best places to look for clues about how this will play out is in CrowdStrike’s competitor reports and comments. SentinelOne stands out as CrowdStrike’s fiercest rival. SentinelOne recently reported its own Q2 2025 fiscal results, and on the earnings call, CEO Tomer Weingarten had a lot to say about the disruption.

Weingarten referred to CrowdStrike’s architecture as fragile and cautioned against taking at face value CrowdStrike’s apparent self-proclamation that its offering is the best product of its kind. He also noted that customer interest in the SentinelOne platform has increased since the outage. SentinelOne, on the other hand, only lowered its full-year sales guidance to the high end, which remained at $815 million. That’s not to say SentinelOne won’t see an eventual increase in sales from the disruption, but it hasn’t seen enough yet for management to raise expectations.

The bottom line here is that, for now, CrowdStrike’s IT outage isn’t the crisis for its finances that it might have initially seemed.

Is the stock a buy now?

Investors have long hailed CrowdStrike as the champion of the cybersecurity industry. In July, it traded at an enterprise value-to-earnings ratio of 24, a giant premium to peers including SentinelOne, Palo Alto Networksand Okta. High ratings require perfect execution. A global outage and a PR black eye don’t fit that bill. That’s why the stock is down 37%, even though the actual financial impact of the outage appears minor.

CrowdStrike is still more expensive than its peers, though at least the valuation no longer jumps off the page compared to the others.

CRWD EV to Revenue data (before) by YCharts.

CrowdStrike isn’t perfect; no company is. But the stock is no longer rated for perfection, making it much easier to buy now than it was in July. I don’t think it could reasonably be argued that the stock is cheap, and investors probably shouldn’t expect it to return to its previous valuation anytime soon. The good news is that CrowdStrike is still a fast-growing tech stock. Its long-term growth alone should create solid investment returns in the coming years.

The stock isn’t a massive bargain, but given how well CrowdStrike seems to be holding up, there’s a strong case for buying the stock for the first time in a while.