Should you buy CrowdStrike after the security breach?

CrowdStrike (CRWD 1.56%) the stock has taken quite a dip since its cybersecurity software caused a global computer outage on July 19. At its lowest point, the stock fell nearly 40% in response to the incident, but has since recovered and is now about 15% below its high. price tag before the break.

So should you buy CrowdStrike while it appears to be recovering?

CrowdStrike software is still in high demand, even after its blunder

Prior to the disruption, CrowdStrike was an undisputed leader in the cyber security space. In addition to endpoint protection (which protects network access points like a laptop), it offers 28 modules that provide other defenses and capabilities on the Falcon platform. These products range from cloud security to identity protection, creating an all-encompassing cybersecurity product that’s hard to break away from once fully integrated.

Indeed, 65% of CrowdStrike’s customer base used at least five modules in the second quarter of fiscal 2025. This shows how integrated CrowdStrike’s products have become with the customer base, which is why the company has not seen a mass exodus of customers immediately after the outage. Additionally, 48 percent of its largest customers (those with at least $100,000 in annual recurring revenue, or ARR) use eight or more modules.

The outage occurred in the last two weeks of CrowdStrike’s fiscal second quarter (ended July 31), so its full effect on the business remains unclear. In June, management forecast total revenue of $3.99 billion (midpoint of its range) for fiscal 2025. After the break, management cut its outlook to $3.90 billion (also midpoint), down of only 2.4%.

That’s a small change in the grand scheme of things, and management has a history of exceeding expectations and raising guidance.

Looking ahead, the next earnings report should shed more light on the fallout from the incident. If the reaction is still muted, CrowdStrike will have proven its resilience and solidified its position as an industry leader.

Stock is still expensive

Because CrowdStrike has been one of the top cybersecurity stocks for years, it has a premium rating. In fact, the stock was so expensive that even a 40% decline didn’t make it a bargain at all — the price-to-sales ratio never dipped below 15.

Data by YCharts.

While the stock no longer trades for nearly 30 times sales, its current valuation is still expensive.

As far as investors can tell at this point, CrowdStrike is still growing rapidly, as its ARR grew 32% last quarter. Investors should keep an eye on fiscal third-quarter results to better understand the long-term implications the disruption may have on CrowdStrike’s business. However, don’t be surprised if it continues to deliver strong results, as the demand for cybersecurity software has never been higher.

So, is CrowdStrike stock a buy here? It could be a good option for investors who don’t have an existing position in a cybersecurity stock. CrowdStrike is still a top choice in cybersecurity, and with massive headwinds blowing in the industry’s favor, it can still be a great long-term investment.