Buffett Brain · Research note
Score updated 27 Oct 2026 · analysis from 2 Jun 2026
CRWD· Technology
CrowdStrike Holdings
CrowdStrike sells fast-growing security software at 75% gross margins, yet still loses money at the operating line and trades at 130 times revenue dreams.
Buffett fit
Weak fit
Owner
30
Durability
27
Management
26
Price
55
Score updated 27 Oct 2026 · analysis from 2 Jun 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Technology stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If I owned all of CrowdStrike, I would be staring at a company that grew sales near 35% last year and still handed me an operating loss of -6.1% on those sales.
The full reasoning comes with a free account.
There is a real here in the form of switching costs, since once a security platform is wired into a company's defenses it is painful to rip out, and that shows in the 35% revenue growth.
The full reasoning comes with a free account.
Management keeps the balance sheet conservative, with of just 0.19, and I give them credit for not betting the company on borrowed money.
The full reasoning comes with a free account.
There is no here at anything like today's price. The owner-earnings yield is a thin 0.77% and the ratio is meaningless at -1043 because the company loses money on a GAAP basis, with an earnings yield of -0.1%.
The full reasoning comes with a free account.
Free account
Read the full CrowdStrike Holdings analysis free
- The full reasoning behind all four pillars
- Graham, Lynch and Greenblatt on the same stock
3 full analyses a week · no card needed
For and against
The strongest points on each side, with the numbers behind them.
In its favor
6- 1Exceptional software economics with a 74.7% , the kind of unit profitability a great franchise needs.
- 2Rapid top-line growth, with revenue at roughly 35% a year as customers adopt the platform.
- 3Genuine switching costs, since a security platform woven into a company's defenses is costly and risky to replace.
- 4Conservative balance sheet, with of only 0.19, so the company is not dependent on lenders.
Concerns
7- 1The valuation offers no , with an owner-earnings yield of just 0.77% and a meaningless of -1043 because earnings are negative.
- 2The business is still unprofitable at the operating line, with an of -6.1% despite years of scale.
- 3Returns on capital are negative, with at -4.2% today and -4.4% averaged over five years, so the is not yet earning anything.
- 4GAAP earnings are negative, leaving an earnings yield of -0.1% and no real profit to value the company against.
Price history
$262-7.1%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
CrowdStrike sells cloud-delivered endpoint and cybersecurity protection on a subscription basis, and the unit economics of the software itself look wonderful, with a 74.7% and revenue at roughly 35% a year. The trouble is that all of that gross profit, and then some, gets spent on sales, marketing, and stock to keep the growth machine running, which is why the is still negative at -6.1%. A great product does not yet mean a great business when the company cannot drop a dollar of its sales to the bottom line.
How this analysis has moved
The call has held across 6 reviews.
Sep 27, 2026 → Oct 26, 2026
What other investors would say
The same company, judged by three other documented playbooks.
Keep researching
Similar companies in Technology
Free weekly email
Liked the read on CRWD? Get the next ones on Monday.
Every Monday: the stocks most of the seven investors newly agree on. One email, unsubscribe any time.
Research, not investment advice.
See the Buffett analysis of CrowdStrike Holdings
The score, the checklist and the full reasoning open with a free account. You get 3 full analyses a week, and this stock is the first one. No card needed.
Create a free account3 full analyses a week · no card needed
Already have an account? Sign in