<div id="readability-page-1">Money Markets CrowdStrike Earnings To Strengthen Bull Case?  ByTrefis Team ,  Contributor.  Forbes contributors publish independent expert analyses and insights. Building a platform to do the job of 1 million analysts for  Great Speculations Follow Author Dec 05, 2025, 06:30am EST Share Save Comment  The CrowdStrike logo is displayed on a mobile phone with a financial stock graph visible in the background, in this photo illustration in Brussels, Belgium, on November 29, 2025. (Photo by Jonathan Raa/NurPhoto via Getty Images) NurPhoto via Getty Images For four months, owning CrowdStrike stock has felt like managing a ticking time bomb. Ever since the notorious outage on July 19th, 2024, that crashed 8.5 million Windows devices, the market has been bracing for the worst. The bear case was straightforward and frightening: “Customers are dissatisfied. They will leave. SentinelOne and Microsoft will capitalize on the opportunity.”  CrowdStrike’s Q3 FY’26 results, published on Wednesday, not only disproved that argument; they obliterated it entirely.  With Net New ARR surging 73% to a remarkable $265 million, CrowdStrike demonstrated that in the realm of enterprise software, Pain is temporary, but a Platform is eternal.  Let’s disregard the “Outage” chatter and examine the new reality. This isn’t a tarnished brand; it is a “Systemically Important Institution” trading at a discount to its own superiority.  The Narrative Shift: From “Liability” to “Essential Utility”  The market anticipated an apology tour. Instead, they were treated to a victory lap.  The Fear: Customers could move to Microsoft Defender or SentinelOne to &#34;diversify&#34; their risk.  The Reality: The customer base is likely still on the rise. While the company didn’t disclose user counts, the strong Net New annual recurring revenue (up 73% year-on-year) necessitates that revenue generated from new clients and existing customer expansions exceeds any losses from churned clients.  The “Aha” Moment: Why didn’t they exit? Because they can’t. Replacing CrowdStrike isn’t akin to changing email providers; it’s like replacing the nervous system of your organization. The switching costs (downtime, integration trouble) far exceed the risks of remaining.  The Signal: Not only did they stay, they purchased more. 49% of subscription clients now use six or more modules (an increase from previous quarters). Clients aren’t diversifying away from CrowdStrike; they are consolidating onto it to cut costs.  The Valuation Sanity Test: The “Premium” Returns  Let’s compare the price tag to the competitors.  MORE FOR YOU CrowdStrike P/S: approximately 22x FY’27 Sales.  SentinelOne P/S: 5x Sales.  Palo Alto Networks P/S: ~11x Sales.  The Distortion: CrowdStrike trades at a substantial premium to its competitors. Is this warranted?  The “Rule of 40” Test: CrowdStrike is a rare entity that balances rapid growth (29% Revenue Growth last year) with significant profitability (25% Free Cash Flow Margin).  The Comparison: SentinelOne is experiencing rapid growth but is still burning cash (displaying negative operating margins). Palo Alto is profitable yet growing at a slower pace. CrowdStrike is the only one offering you Growth + Cash Flow on a substantial scale.  The Verdict: You are paying a “Ferrari” price, but the engine has just demonstrated it can endure a crash test and still finish the race.  The New Moat: “Falcon Flex” is the Trap  This is the most underrated aspect of the earnings report. The outage compelled CrowdStrike to innovate, resulting in the accidental creation of a superior solution: Falcon Flex.  The Product: Instead of acquiring separate modules (Endpoint, Identity, Cloud), clients sign a comprehensive “Flex” contract and utilize whatever they choose, whenever they choose.  The Trap: It decreases the friction to experiment with new tools.  The Data: Flex customers typically use ~9 modules on average (in contrast to non-Flex customers)  The Outcome: Once a customer begins utilizing CrowdStrike for Identity and Cloud, they are mathematically locked in. This essentially eliminates the “Point Solution” competitors (like Okta or Wiz) within those accounts.  The Competitive Landscape: The “Microsoft” Myth  The primary bear argument was that Microsoft would prevail because “Defender is free/good enough.”  The Reality Check: The outage ironically underscored Microsoft’s weaknesses. The fact that a single update could incapacitate 8.5 million Windows devices reminded CIOs that Microsoft is the sole point of failure, not CrowdStrike.  The Success: Management emphasized record achievements in Next-Gen SIEM (Security Information and Event Management), effectively replacing outdated tools like Splunk. They aren’t confined to protecting endpoints anymore; they are evolving into the Data Lake for the entire security operation.  What Can Halt Their Progress Now?  The “Outage Risk” is now recognized. What is the new risk?  Legal Liability: The lawsuits arising from the outage (Delta Air Lines, etc.) are still pending. While likely manageable, a massive billion-dollar settlement could compromise cash reserves.  Valuation Compression: At 22x Sales, the stock is again priced for perfection. If growth slows down, the multiple will decrease sharply.  Our Perspective  CrowdStrike has officially left the “Penalty Box.” The Q3 earnings report confirmed that the company possesses Pricing Power (Net New ARR up 73%) that rivals Apple or Microsoft.  Bull Case: Falcon Flex becomes the industry standard, driving module adoption to 15+, and CrowdStrike transforms into the “Salesforce of Security.”  Bear Case: Ongoing legal battles may persist, and the premium valuation leaves no room for error in case the macroeconomy decelerates.  The Forecast: The “Redemption Trade” is genuine. The outage served as a stress test, and CrowdStrike emerged successful.  A Multi-Asset Portfolio Outperforms Solo Stock Selections. Individual selections are volatile, but diversified assets can balance one another. A multi-asset portfolio aids in staying the course, capturing upside, and mitigating downside. The asset allocation framework from Trefis’ Boston-based wealth management partner saw positive returns during the 2008-09 period when the S&amp;P lost over 40%. Our partner’s strategy now incorporates the Trefis High Quality Portfolio , which has a history of comfortably outperforming its benchmark that comprises all three – the S&amp;P 500, S&amp;P mid-cap, and Russell 2000 indices.  Editorial Standards Reprints &amp; Permissions LOADING VIDEO PLAYER... FORBES’ FEATURED Video</div>

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<p>CrowdStrike's Q3 FY'26 results showed a 73% surge in Net New ARR to $265 million, disproving bearish arguments. Despite past outages, CrowdStrike's platform remains essential, with 49% of clients using six or more modules. The company trades at a premium due to its growth and profitability, outperforming competitors like SentinelOne and Palo Alto Networks. The introduction of Falcon Flex enhances client retention. Legal liabilities from past outages pose risks, but CrowdStrike's strategic position remains strong.</p>