CrowdStrike Stock Nears Record High, Dip Ahead of Earnings?

Key Points

• CrowdStrike stock shows volatility and may be due for a pullback despite strong revenue growth.
• The company has significant cash flow from its Falcon platform, but its revenue is mostly from U.S. Fortune 500 companies and the government, which may face cutbacks.
• Analysts are generally bullish on CRWD stock but have set price targets that suggest a potential pullback before the next earnings report.

It's said about the weather that if you give it a few minutes it will change. The same could be true about sentiment for CrowdStrike Holdings Inc. NASDAQ: CRWD. The company is a month away from earnings, and the stock is behaving in a volatile fashion. At the beginning of April, CRWD stock was looking oversold based on its Relative Strength Indicator (RSI).

However, the stock is leaning towards overbought territory as the calendar gets ready to flip. There are macroeconomic reasons for this. There is some concern that corporations will pull back on spending. And while cybersecurity spending is largely considered to be immune from this, it’s important to note that CrowdStrike has generated significant growth from it.

CrowdStrike has no tariff exposure per se, but tariff concerns have institutional investors looking for liquidity from technology stocks like CrowdStrike that are leading the market. There are reasons investors wonder if CRWD stock may be due for a pullback.

Is History Getting Ready to Rhyme Again?

Historical patterns don’t repeat, but they often rhyme. At the end of 2023, higher interest rates began to wear on corporate spending, even in areas like cybersecurity that are viewed as recession-proof.

CrowdStrike has delivered solid single-digit revenue growth in the last five quarters. The top line number crossed the $1 billion mark in fiscal year 2025 (which ended in the company’s last quarter), and the company reported over 20% year-over-year growth in the last four quarters. That said, YOY growth slowed by nearly 20% from the first to last quarters.

That's one data point, and a few quarters is a small sample size. However, spending did trail off at the end of 2023, and with it, the stock price of companies like CrowdStrike. The company is expecting to generate growth in annual recurring revenue (ARR) as customers begin to subscribe to areas of its Falcon platform that they have been using as part of the company’s customer compensation packages.

That would justify buying the stock even with the stock trading at a price-to-sales (P/S) ratio that’s significantly higher than its 3- or 5-year average.

What Investors Love About CrowdStrike

CrowdStrike is proving to be a free cash flow (FCF) machine. It can generate strong cash flow because its Falcon platform has high gross margins and is benefiting from customer adoption.

The bull case for CrowdStrike is that revenue will increase as customers decide to retain the modules they received as part of the company’s compensation packages for last year’s outing. That could go a long way towards changing the direction of revenue growth.

What May Concern Investors

However, if investors choose to, there are a couple of concerns about the company’s revenue. First, it’s concentrated mainly on Fortune 500 and customers in the U.S. government. You could argue that’s where the money is, but that’s also where the most significant cutbacks are happening.

Also, the company’s customer base is heavily based in the United States. Once again, in and of itself, that’s neither good nor bad, but it’s something to watch at a time when international stocks may be a better place for investors.

Analysts Paint a Mixed Outlook for CRWD Stock

With one month to go before the company reports earnings, investors will be watching what analysts have to say. On April 23, Roth Capital initiated coverage in CrowdStrike with a Strong Buy rating and a $410 price target. However, it’s worth noting that the price target is about 3% lower than the company’s closing price on April 28, 2025.

Other analysts show a similar pattern. They have an overall bullish sentiment towards CRWD stock but price targets that suggest a pullback may be in order. However, that’s nothing that a trade deal or two can’t change.