CrowdStrike Stock: Is CRWD Underperforming the Technology Sector?

Austin, Texas-based CrowdStrike Holdings, Inc. (CRWD) is a cybersecurity company that provides cloud-delivered, subscription-based security services through its Falcon platform. Valued at a market cap of $121.5 billion, the company’s offerings include endpoint protection, cloud workload security, identity protection, threat intelligence, vulnerability management, and automated response tools. 

Companies worth $10 billion or more are typically classified as “large-cap stocks,” and CRWD fits the label perfectly, with its market cap exceeding this threshold, underscoring its size, influence, and dominance within the software - infrastructure industry. The company is known for its lightweight agent architecture, extensive telemetry & AI-driven analytics, striving to prevent breaches and protect against evolving cyber threats.

This cybersecurity company has slipped 8% from its 52-week high of $517.98, reached on Jul. 3. Shares of CRWD have declined 1.9% over the past three months, underperforming the Technology Select Sector SPDR Fund’s (XLK) 12.6% return during the same time frame.

Nonetheless, in the longer term, CRWD has rallied 65.1% over the past 52 weeks, significantly outpacing XLK's 24.5% uptick over the same time period. Moreover, on a YTD basis, shares of CRWD are up 39.2%, compared to XLK’s 19.8% rise.

To confirm its bullish trend, CRWD has been trading above its 200-day moving average since early November 2024, with slight fluctuations, and has remained above its 50-day moving average since mid-September. 

On Aug. 27, CRWD delivered strong Q2 results, prompting its shares to surge 4.6% in the following trading session. Due to strong growth in its subscription revenue, the company delivered total revenue of $1.2 billion, up 21.3% from the year-ago quarter and 1.7% ahead of analyst expectations. Moreover, its adjusted EPS improved 5.7% year-over-year to $0.93, topping consensus estimates of $0.83. Additionally, the company achieved record Q2 net new Annual Recurring Revenue (ARR) of $221.1 million, record Q2 cash flow from operations of $332.8 million, up 1.9% from the same period last year, and record Q2 free cash flow of $283.6 million, reflecting a 4.2% rise from the prior-year quarter. 

CRWD has considerably outpaced its rival, Palo Alto Networks, Inc. (PANW), which gained 16.9% over the past 52 weeks and 10.3% on a YTD basis. 

Despite CRWD’s recent underperformance, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of "Moderate Buy” from the 47 analysts covering it, and the mean price target of $490.76 suggests a 3% premium to its current price levels.