It’s been just over a week since CrowdStrike Holdings Inc. (NASDAQ: CRWD) reported its first quarter earnings for its 2026 fiscal year. After defiantly making an all-time high (ATH) despite mixed guidance, CRWD stock has retreated a bit. However, it’s still trading within striking distance of the ATH.
Should investors chase CRWD stock at these levels or wait for a better entry?
[content-module:CompanyOverview|NASDAQ: CRWD]The bullish argument would be that demand for cybersecurity is growing.
The cybersecurity sector is currently valued between $250 billion and $300 billion. It’s expected to climb to over $500 billion by 2030, with a compound annual growth rate (CAGR) between 11% and 13%.
Most individuals have been the victims of a data breach. If they haven’t, it’s only a question of when, not if, they’ll be impacted.
That makes the case for owning cybersecurity stocks and holding CRWD stock.
The more cautious outlook stems from seasonality risks. The market is moving into what is, historically, a time of less volume. In many cases, that means the best thing an investor can do is sit tight, particularly with stocks that are near an ATH.
That may be a good strategy with CrowdStrike stock as the company’s growth is slowing at a time when analysts are questioning the stock’s lofty valuation.
CRWD Stock Is Trading at a Premium
Some analysts dismiss valuation for technology stocks, specifically cybersecurity stocks. They argue that many companies in this sector have high growth expectations due to the current and forecasted impact of cybercrime.
However, many companies in this sector are not profitable. So, to say that the average price-to-earnings (P/E) ratio for stocks in the sector is around 55x is a bit misleading. In fact, many of the top names, such as Palo Alto Networks Inc. (NASDAQ: PANW), have P/E ratios double that or more.
That said, CRWD stock is trading at a P/E ratio of around 912x. That’s a steep premium, particularly for a stock that’s trading near its 52-week high as well as its all-time high.
Bernstein Downgrades CRWD Stock
[content-module:Forecast|NASDAQ: CRWD]Some will say CrowdStrike’s premium, even at this level, is justified. They could point to a stock like Palantir Technologies Inc. (NASDAQ: PLTR), which is also richly valued. Both companies are showing strong growth that’s expected to continue.
However, that sentiment is not shared by all analysts. Since its earnings report, over two dozen analysts have weighed in, and most have been bullish on the stock.
Susquehanna has been one of the most bullish analysts, raising its price target on CRWD stock from $425 to $530. Dan Ives of Wedbush weighed in with a $525 price target.
However, on June 6, Bernstein downgraded CrowdStrike from Outperform to Market Perform with a price target of $371. That means the firm believes CRWD stock could shed all its gains since the end of April.
It’s All About Executing the Plan
Where you fall on buying CRWD stock will depend on what you believe about the company’s ability to deliver on growth expectations. After its much-publicized outage last summer, CrowdStrike made goodwill offerings to many customers.
The impact of those offerings will lessen in the next few quarters, and the company expects strong growth in the second half of the year. That’s a key reason why CrowdStrike maintained its full-year revenue outlook. The company has also taken cost-cutting measures to help boost its bottom-line forecast.
Additionally, CrowdStrike maintains that its customers are not only renewing their current contracts but also continue to add services from the company’s Falcon platform. If that’s true, investors will see the results in the coming quarters.
CRWD stock has been in a bullish pattern in the last three months, but the stock is currently trading right near the convergence of several key moving averages. If the stock fails to hold those levels, a retreat to $450 is possible. That corresponds to the consensus target of analysts tracked by MarketBeat. However, long-term investors may get more excited if the stock drifts to a stronger support level around $415.
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