On June 3, CrowdStrike (CRWD 0.72%) will report results for its fiscal 2026's first quarter, which ended on April 30. The cybersecurity giant is hoping to put its fiscal 2025 firmly in the rear-view mirror, as the year was marred by a devastating gaffe -- the flawed software update it released on July 19 that crashed around 8.5 million Windows computers run by its clients, disrupting the operations of banks, airlines, healthcare providers and more.
That incident took a near-term toll on CrowdStrike's business, but management's latest guidance suggests that it won't suffer any lingering long-term effects. That's great news because the digital landscape is growing increasingly dangerous, so cybersecurity providers like CrowdStrike have enormous opportunities in front of them.
CrowdStrike's flagship Falcon platform is one of the only all-in-one solutions in the industry. It makes it easy for businesses of all sizes to protect cloud networks, employee identities, endpoints, and more. But should investors buy CrowdStrike stock ahead of its June 3 report?
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A leader in AI-powered cybersecurity
Historically, the cybersecurity industry was fragmented -- the various providers specialized in specific product segments, which meant businesses had to piece their security stacks together from multiple vendors. As a result, achieving adequate protection was often expensive and complicated, which helps explain why CrowdStrike's Falcon platform has become so popular.
Falcon features 29 different modules (products), but businesses can pick and choose which ones they want, so they can create a custom solution that's suited to them. During its fiscal 2025 fourth quarter (which ended Jan. 31), 67% of CrowdStrike's customers were using at least five modules, which was a record-high percentage.
But CrowdStrike launched a new subscription option in late 2023 called Falcon Flex that allows businesses to reallocate their budgets to different modules as their needs change during their contract periods. As a result, Flex subscribers try an average of nine modules each. These introductions to products they might not have selected initially could lead to clients spending more money with CrowdStrike over the long term.
Artificial intelligence (AI) is the secret behind Falcon's success. Its goal is to automate as many threat detection and incident response processes as possible. The company's AI models are trained on new security incidents each day, so they are constantly learning and improving, allowing Falcon to seamlessly operate in the background to protect customers.
But CrowdStrike also developed Charlotte AI, a powerful virtual assistant that's embedded into Falcon. It's especially useful for larger organizations with complex digital environments, and saves cybersecurity managers over 40 hours per week (on average) by autonomously filtering alerts and only surfacing incidents that actually need attention.
Revenue growth likely decelerated further in fiscal 2026's first quarter
CrowdStrike's quarterly revenue growth has steadily decelerated over the last few years. The company is maturing, and its revenue base has become so large that it's difficult to maintain lightning-fast growth.
CRWD Operating Revenue (Quarterly YoY Growth) data by YCharts.
The July 19 global IT outage -- which was triggered by a flawed Falcon software update -- certainly didn't help. Management said most of its prospective new customers remained in its sales pipeline, but many of them decided to delay signing their deals. Plus, the company offered "customer commitment packages" that included discounted Falcon Flex subscriptions to its many affected clients.
Those packages have been a headwind to the cybersecurity giant's revenue growth recently, but they likely have increased the odds that those customers will stick with Falcon for the long term. In fact, management said the packages have accelerated the adoption of its Flex subscriptions, so CrowdStrike could earn back what those discounts and incentives cost it over time.
Nevertheless, revenue growth is expected to continue trending down on a percentage basis for now. CrowdStrike's guidance for the fiscal 2026 first quarter was for $1.1 billion in revenue, which would be a year-over-year increase of just 20%. However, it's important to note that management has maintained its long-standing outlook that it will reach $10 billion in annual recurring revenue by fiscal 2031, up from $4.2 billion today.
Should investors buy CrowdStrike stock before June 3?
CrowdStrike stock isn't cheap right now. It's trading at a price-to-sales (P/S) ratio of 28.6, which is a steep premium to its main competitors in the cybersecurity industry.
CRWD PS Ratio data by YCharts.
In the past, CrowdStrike has thoroughly deserved its premium valuation because it was growing its revenue so much faster than its peers. However, Palo Alto Networks, Zscaler, and SentinelOne grew their revenue by 15%, 23%, and 29%, respectively, in their most recent quarters. Therefore, CrowdStrike no longer has a clear edge in that department, so investors would be right to call its valuation into question.
With that said, if the company does grow its annual recurring revenue by 135% to $10 billion by fiscal 2031, its stock might actually be cheap right now for investors who are willing to hold it for the next five or six years. But that long-term outlook is key, because there is no guarantee the stock will deliver positive returns over the next one or two years given its lofty valuation.
As a result, the answer to the question of whether investors should buy CrowdStrike stock before June 3 depends entirely on their ability and willingness to hold it for the long run. Short-term traders should probably stay away for now.
