CrowdStrike broke out to an all-time high on Tuesday — climbing back near the all-time high reached before shares of the cybersecurity leader plummeted in the wake of a global outage crisis. CrowdStrike stock is Thursday's selection for IBD 50 Stocks To Watch.
Shares are in a buy zone from a flat base's buy point of 389, according to IBD MarketSurge, as the cybersecurity firm and artificial intelligence play appears to have turned the crisis into a temporary blip.
Sales and earnings growth have remained in double digits since the outage. For the third quarter ended Oct. 31, revenue of $1.01 billion rose 29% from the prior year while earnings per share of 93 cents were 13% higher. The company also achieved a milestone in its third quarter as average recurring revenue surpassed $4 billion with a 97% retention rate.
How The Crisis Happened
On July 19, CrowdStrike sent a software update to customers that triggered major technology outages across a slew of industries, hitting airlines, banks and hospitals. The AI stock was on the way down when the crisis happened, and plummeted further within days. From a peak reached earlier in the month, shares dropped by nearly 50%.
Many analysts on Wall Street feared would result in client attrition and general loss of goodwill. But by offering discounts to retain clients, CrowdStrike has managed to boost its stock in the months since. Meanwhile, the company scored approvals from analysts for its handling of the crisis.
Shares touched an all-time high of 411.30 on Tuesday, ahead of their precrisis high of 398.33. At its lowest point, CrowdStrike stock dropped to an August low of 200.81. The stock stood near $393 in afternoon trades Thursday, down 1%.
CrowdStrike provides security tools for the cloud. It uses artificial intelligence to detect and respond to cyber events that threaten enterprise data and workflow.
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CrowdStrike stock has a Composite Rating of 98 while its EPS Rating of 97, showing the company managed to minimize the impact of the July crisis on its revenue and profitability. Over the past eight quarters, sales growth has fluctuated between 29% and 48% while earnings growth has ranged between 13% and 106%.
CrowdStrike ranks third in the enterprise software security group, according to IBD Stock Checkup.
CrowdStrike Stock Outperforms S&P 500
The Relative Strength Rating reflects the stock's outperformance since July and has surged from 71 six months ago, to 92 currently. The rising relative strength line is approaching its precrisis levels as well. The line compares the stock to the performance of the S&P 500.
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Analysts polled by FactSet are bullish on CrowdStrike's profits for 2025 and 2026. Estimates stand at $3.76 per share in 2025 earnings and $4.38 in 2026 compared with $3.09 in earnings per share in 2024.
Mutual funds own 44% of outstanding shares. More funds have been net buyers for six out of the seven past quarters. The stock is also a holding in several funds in the IBD mutual fund index: the Harbor Disruptive Innovation Fund (HAMGX) and the Franklin Growth Fund (FKGRX) hold shares of CrowdStrike stock.
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