Time to Jump on the CrowdStrike Bandwagon?

NYSE Trader

Is it time to get back in CrowdStrike  (CRWD) ? 

That's a serious question that I have been asking myself. CrowdStrike Holdings had been a top-10 and often a top-five Sarge-folio holding for a number of years. I had worked the size of my exposure somewhat lower as the stock had struggled from July 2025 into the present day. Then came my big break. I was ordered to liquidate and close certain accounts due to my recent divorce and send certain funds where they had to go.

I sold my last, decently-sized chunk of CRWD at an average price of $432.50 on Thursday, March 16 as, over two days, I sold that entire portfolio. As we all know too well, U.S. equities in general and CRWD specifically have been pummeled ever since.

CRWD bottomed, at least for now with a $361 handle this past Friday. I see it trading with a $385 handle while I work on this piece.

Strong Fundamentals

CrowdStrike reported on May 3. For the firm's fiscal fourth quarter (ended January 31), the firm posted an adjusted EPS of $1.12 on revenue of $1.305 billion. Those top- and adjusted bottom-line results both beat Wall Street's expectations. The sales print was good enough for year-over-year growth of 23.6%.

Cash flows were strong. The balance sheet is still in excellent condition. Backorders were strong as well. Unfortunately, sales growth was not quite as robust as I (or most investors) would probably like for a stock trading at 81-times (then) or 76-times (now) forward-looking earnings. That's a lot. The advance of agentic AI has been pressuring cloud-based software stocks, and the cybersecurity sub-industry was no exception.

Guidance Was 'Meh'

For the current quarter, CrowdStrike projected revenue of $1.36 billion to $1.364 billion versus expectations for $1.36 billion, leading to an adjusted EPS of $1.06 to $1.07. 

Wall Street had been looking for about $1.07, so, not really a beat. Wall Street has not budged since. For the full fiscal year, the firm predicted revenue of $5.87 billion to $5.93 billion, taking the midpoint above the $5.87 billion that Wall Street had in mind. Wall Street is now at $5.91 billion. This would, in the guidance provided, lead to an adjusted full year EPS of $4.78 to $4.90. With Wall Street looking for about $4.84, this is not really a beat either. Wall Street now sees $4.86.

Nice Words

CrowdStrike caught a couple of nice words from sell-side analysts on Monday:

Alex Zukin of Wolfe Research, who is rated at five stars (out of five) at TipRanks, upgraded CRWD from a Peer Perform (hold-equivalent) to an Outperform (buy-equivalent) rating with a $450 target price.

Meta Marshall of Morgan Stanley, who is rated at 3.5 stars at TipRanks, reiterated her "Buy" rating on CRWD as well as her $510 target price.

The Chart​

​Readers will notice, as we pointed out almost four weeks ago, that from mid-2024 through late 2025, the stock had built two rising-wedge patterns of bearish reversal that both worked very well. Readers will also see the head-and-shoulders pattern of bearish reversal at the top of the chart that simply worked a little too well for the "long and wrong" crowd.

Now, we see what may be an Inverted head-and-shoulders pattern forming. This would be a bullish development. The pattern, at this point, is incomplete. Relative strength is starting to improve again after a recent downturn, but the daily MACD is really in tough shape. The histogram of the nine-day EMA is well below the zero-bound and the 12-day EMA has crossed back below the 26-day EMA. Both of those lines also remain deeply into negative territory. These are bearish signals.

I would like to re-initiate CRWD, but discipline demands otherwise. Monday is a nice day. The stock is up almost 5%. Jump on this bandwagon? My idea, though it may cost some opportunity up front, is to wait for the stock to approach its 21-day EMA and see what the swing crowd does there. If the shares price does get there, the indicators would be in better shape and the algos might take CRWD to the 50-day SMA and beyond.

For me, getting long a $390/$410 May 26 (a week ahead of earnings) bull call spread for a net debit of maybe $8.00 with a chance to bring back $20.00 for a profit of $12.00 makes more sense than laying out the dough for an equity stake.

Related: 3 Potential Outcomes in Iran and What They Mean for Financial Markets

At the time of publication, Guilfoyle had no positions in any securities mentioned.