CrowdStrike Is Splitting Its Stock 4-for-1 on July 2. What Investors Should Know Before the Date Arrives.
The cybersecurity giant is about to execute its first stock split.
By Leo Sun
CrowdStrike (CRWD 1.23%), one of the world's largest cybersecurity companies, will execute a 4-for-1 stock split on July 2. Let's see why it's splitting its stock, which has risen nearly 40% over the past 12 months, and whether it matters to long-term investors.
Why is CrowdStrike's stock soaring?
Many traditional cybersecurity companies deploy their services via on-site appliances, which are expensive, take up a lot of space, and require constant maintenance. CrowdStrike eliminates those issues with its cloud-native subscription services, which don't require any appliances.
From fiscal 2021 to fiscal 2026 (which ended this January), CrowdStrike's revenue rose more than fivefold from $874 million to $4.81 billion, its adjusted subscription gross margin expanded from 77% to 81%, and its adjusted EPS surged from $0.27 to $3.73.
CrowdStrike's customers start with four basic modules on its Falcon platform and can subscribe to additional modules for specific services. At the end of fiscal 2021, only 24% of its customers had adopted at least six of those modules. But by the end of fiscal 2025, that percentage had more than doubled to 50%. The stickiness of its platform increased, even as inflation, higher interest rates, and other macro headwinds rattled the global economy. CrowdStrike also bounced back from a devastating, brand-tarnishing system outage in 2024.
From fiscal 2026 to fiscal 2029, analysts expect CrowdStrike's revenue to grow at a 22% CAGR. They also expect it to turn profitable by generally accepted accounting principles (GAAP) in fiscal 2027 and grow its GAAP net income at a 104% CAGR over the following two years.
Will a stock split boost CrowdStrike's stock?
CrowdStrike's stock might superficially seem "expensive" at $670 per share, but its trading price doesn't determine if it's undervalued or overvalued. But with a market cap of $173 billion, it certainly looks pricey at 29 times this year's sales and 136 times its forward adjusted EPS.
Its upcoming 4-for-1 stock split won't reduce those valuations, because it's merely splitting a single pizza into four smaller slices. It might look cheaper in the high $160s, but those smaller slices are still trading at the same forward price-to-sales and price-to-earnings ratios.
In the past, stock splits were more meaningful when investors could only buy single shares or round lots of 100 shares. Today, most brokerages offer fractional trading -- which makes it much easier for smaller retail investors to buy shares of high-priced stocks.
Therefore, stock splits matter only for options traders, who pin single contracts to round lots, and for the company, which gets a bit more flexibility in its stock-based compensation plans. Most investors should simply tune out that near-term noise and focus on its long-term strengths.