QS Research · Michael Burry's Scion Capital analyst template · 2006
CrowdStrike Holdings, Inc. (CRWD)
As of 2026-11-06 · 12/15 boxes filled from SEC filings and market data
Conclusion: SHORT
Conviction medium · base case -38% · downside -50% · upside +23%
Using section 13's TTM-to-Jul-2026 base (revenue $5.40B, FCF $1.61B, EBIT -$133.0M), CRWD at $218.40 already capitalizes $219.36B of EV, or 40.65x sales and a 0.7% FCF yield. My base case uses 25x EV/sales — still a premium to PANW's 22.17x and the peer median of 6.19x — giving $135.0B EV + $4.26B net cash = $139.3B equity, or about $136/share, -38%; 20x gives about $110 (-50%) and 50x gives about $268 (+23%). The market is paying for AI-security scarcity and 25% ARR growth while ignoring that TTM EBIT is negative, FY2026 GAAP operating loss widened to -$293.3M, revenue growth is decelerating, net retention has fallen from 125% to 115%, and insiders are selling. I would short, but with medium conviction because the upside path still exists if the multiple holds and ARR reaccelerates.
Key numbers
- Share price: $218.40
- Market cap: $223.63B
- Latest financial period: TTM to Jul 31, 2026
- Revenue (TTM): $5.40B
- P/E (TTM): 4970.0x
- Price / book: 43.83x
The 15 boxes
- ✓ 1. Long-form business notes
CrowdStrike sells SaaS subscriptions to its Falcon platform, now 33 cloud modules delivered through one lightweight sensor and sold direct with channel partners under a land-and-expand model. From FY2021 to FY2026 revenue grew from $874.4M to $4.81B and gross profit from $644.9M to $3.59B, but operating income stayed negative, from -$92.5M in FY2021 to -$293.3M in FY2026. The oldest report shows 19 modules, 9,896 subscription customers at January 31, 2021, 125% dollar-based net retention, and $1.1B ARR; the latest shows Enterprise Graph, AI-native positioning including Charlotte AI and AIDR, 115% dollar-based net retention at January 31, 2026, and FY2026 international revenue of $1,595.4M.
- ✓ 2. Competitive advantage
The company claims a durable architectural advantage — a cloud-native, single-sensor platform it says no competitor matches — and the numbers show a real gross-profit engine ($3.59B gross profit on $4.81B FY2026 revenue, ≈75%) plus rising operating cash flow ($1.61B FY2026). But there is no operating-return evidence of a moat: operating income was negative in every year FY2021-FY2026 and worsened to -$293.3M in FY2026, the only profitable net year (FY2024, $72.2M) came from non-operating income, not operations. Switching costs look thin — contracts run one to three years with no renewal obligation and customers have already declined to renew — and the July 19, 2024 incident damaged the brand while competitors with greater resources and larger customer bases attacked the account base.
- ✓ 3. 10-Q takeaways
The quarter ended July 31, 2026 showed 26% total revenue growth and 25% ARR growth, with subscription gross margin up to 78% and total gross margin at 75%. The operating result remained a loss of $33,232 thousand; reported net income of $5,306 thousand was supported by $43,881 thousand of interest income and a $1,373 thousand tax benefit, not by operating profit. The 10-Q also flags continued July 19 Incident costs, delayed sales cycles, and customer commitment packages that have increased contraction and reduced upsell dollar values.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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