TL;DR / Headline Signal
- Setup: CrowdStrike (CRWD) reports Q3 FY26 (quarter ended Oct 31, 2025) after the close on December 2, 2025.
- Street numbers: Consensus is looking for roughly $0.94 in non-GAAP EPS on ~$1.21B in revenue, about 20% YoY growth.
- Base case on the print: A clean beat on EPS and revenue, with management at least reaffirming or nudging up FY26 guidance after a year of guidance drama.
- Base case on the stock: From a reference price of $504.13, the setup favors a directionally bullish reaction, with an expected absolute move around 6%, slightly below the ~7.4% move implied by the front-week straddle.
- Guidance bar: The market is effectively expecting “strong enough” guidance to show that the Windows-outage fallout and discounting phase are largely behind the company. “Just inline” guidance is the main risk.
- Tape read in one line: Short-dated options are expensive and put-leaning on new volume, but call-heavy in long-dated open interest, which looks like hedged long exposure rather than outright fear.
Overall this looks like a high-expectations, hedged-bullish setup where the bigger risk is guidance disappointment, not a miss on the quarter itself.
What the Street Expects
The Q3 FY26 story is pretty clean:
- Revenue: CrowdStrike has guided Q3 FY26 revenue to roughly $1.208–$1.218B, and consensus has settled near $1.21B (+20% YoY).
- EPS: Management guided $0.93–$0.95 in non-GAAP EPS; consensus is pegged at $0.94, basically right in the middle of the range.
- Context: The company has beaten EPS and revenue in each of the past four quarters, with mid-teens average EPS upside.
Where things got messy this year was forward guidance, not execution:
- Earlier in the fiscal year, the initial FY26 forecast came in below the Street’s loftier hopes, and the stock sold off despite another beat.
- A later quarter saw a soft revenue outlook tied to fallout from the July 2024 Windows outage and discounting “Customer Commitment Packages” (CCP), which again pressured the stock.
Going into this Q3:
- The Street wants proof that growth can stay ~20%+ while margins expand.
- Guidance needs to show that the post-outage discounts and CCP drag are fading, not getting worse.
- The stock is still on a tear: CRWD is up ~45% over the last year and year-to-date, with the shares sitting about 11% below a 52-week high near $567.
Bottom line: This is priced for good news, not perfection, but the guidance bar is definitely higher than it was the last time management misjudged the mood.
Fundamentals & Filings Snapshot
From recent filings, transcripts, and fundamentals data:
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Scale & growth
- Trailing-twelve-month revenue is in the mid-$4B range with roughly mid-20s percent growth, down from the high-20s to low-30s pace a couple of years ago but still elite for a name this size.
- Annualized recurring revenue (ARR) last quarter was around $4.66B, up ~20%, with strong contributions from Falcon Flex subscriptions and next-gen SIEM.
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Profitability
- Gross margins are a hefty ~74% on a trailing basis.
- GAAP net margins are still slightly negative (~-7%), but non-GAAP profitability and free cash flow margins have been trending higher, which is a core part of the bull case.
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Valuation
- CRWD trades at roughly 26× trailing sales, and forward P/S in many datasets is in the low-20s, well above cybersecurity peers like PANW, CHKP, and S.
- That’s the heart of the “priced to perfection” debate: the story requires sustained 20%+ revenue growth and expanding margins to justify this.
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Windows outage + legal overhang
- The July 2024 Windows outage caused massive disruptions, including for airlines like Delta, and has led to ongoing legal and reputational fallout.
- The financial impact showed up in the form of discounts, extended subscriptions, and customer retention packages, which management has said are tapering off but are still a drag on reported revenue in fiscal 2026.
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Restructuring
- Mid-2025, CrowdStrike announced layoffs of about 5% of its workforce while still hiring into key product and go-to-market roles; the stated goal was to protect profitability and sharpen focus, not to shrink the business.
Put together, the fundamental story is still “elite business, slowing growth, heavy valuation, and some self-inflicted scars.” That’s the backdrop for reading the options tape.
Options & Tape Diagnostics
All of the numbers below are as of the Dec 1, 2025 snapshot with CRWD at $504.13.
1. Event expiry and implied move
- The first standard expiry after the Dec 2 AMC report is Friday, Dec 5, 2025.
- The 12/5 ATM straddle (505 strike) is pricing about:
- Call mid: ~$18.08
- Put mid: ~$19.15
- Total straddle premium: $37.23
- Relative to the $504.13 spot, that’s ≈7.4% of the underlying price.
For context:
- 30-day realized volatility annualizes around 35%, and 90-day around 38%, while the 12/5 expiry’s OI-weighted IV is ~93%, more than 2.5× recent realized volatility.
- The next expiries (12/19 and 3/20) show OI-weighted IVs around 63% and 50%, respectively, confirming a classic event-vol hump that collapses after earnings.
Takeaway: The options market is squarely pricing a big, earnings-driven move, with front-week vol extremely elevated relative to trailing realized.
2. Short-dated volume and put/call balance
Across the whole chain:
- Total option volume: ~36.3K contracts.
- Put/call volume ratio: ~1.03.
- Put/call OI ratio: ~1.10.
So on the surface, the chain is slightly put-heavy, but not in a panic way.
Zoom into expiries 0–14 DTE (12/5 and 12/12):
- Short-dated call OI: ~11.7K
- Short-dated put OI: ~10.3K
- Short-dated call volume (today): ~11.6K
- Short-dated put volume (today): ~12.1K
Interpretation:
- New flow into short-dated puts slightly exceeds calls, even though existing open interest is call-heavy.
- That pattern fits a market of hedged longs topping up protection into the event rather than wholesale bearish positioning.
Also notable: Over half of the day’s total options volume is in the 12/5 expiry alone, which is exactly what would be expected for a focused earnings event.
3. Skew and wings
For the 12/5 event expiry:
- ATM IV (505 strike): ~88.7%
- Approximate 25-delta call: 537.5 strike, IV ~85.4%
- Approximate 25-delta put: 475 strike, IV ~87.8%
So near the event:
- Downside puts trade a touch richer than upside calls in IV terms, a modest downside skew consistent with hedging demand rather than crash panic.
For a more “normal” expiry like 3/20/2026:
- ATM IV is in the high-40s.
- 25-delta call IV is actually a bit higher than 25-delta put IV, giving a slight upside skew further out.
That pattern—downside-skewed in the event week, slightly upside-skewed longer-dated—fits the story of investors optimistic on the long-term franchise but nervous about near-term headlines and guidance.
4. Strike “walls” and concentration
Looking specifically at 12/5:
- The largest total OI strikes cluster around $500–$510, with a notable wall also at $550.
- The $500 and $505 strikes act like a near-term “pin” area, while $550 looks like an upside ceiling where call sellers have been active.
In the LEAP bucket (≥~12 months):
- Combined LEAP OI is call-tilted: roughly 57% of OI in calls vs 43% in puts.
- That’s structurally bullish positioning—market participants owning long-dated calls or call spreads as a levered way to stay in the story.
5. “Unusual” prints
Within the high-impact or unusual flows, a few themes stand out:
- Front-week near-the-money action around 500–505 in both calls and puts: classic earnings straddle/strangle and gamma-trader territory.
- Downside protection: concentrated put buying down around the 450 area for 12/5, as well as 240-strike long-dated puts in early 2026. Those are tail hedges, not straightforward directional shorts.
- Upside speculation around 550 in the front week and above 600 in some 2027+ expiries, consistent with the call-heavy LEAP OI.
Overall, the tape reads as:
“Hedged bulls with some tail protection, plus traders renting short-dated vol around a fairly fat event premium.”
That’s a setup where a “good enough” print plus steady guidance can still squeeze the stock higher, even if everyone knows it’s expensive.
Sentiment: News, Analysts, and Social
Analysts
Recent previews and notes cluster around a common theme:
- Quality is not in doubt; the debate is valuation and guidance.
- Some previews explicitly expect a Q3 beat and a guidance raise, but keep ratings at “hold” because the stock is “priced to perfection.”
- Others frame it as a “hold before Q3 earnings”—acknowledging strong underlying demand (Falcon Flex, next-gen SIEM, Charlotte AI) but flagging valuation and cost growth.
- Several brokerages have raised price targets into the $560–580 zone over the past few months, arguing that CrowdStrike continues to win share in endpoint, cloud, and SIEM.
News flow
- Outage / discount overhang: Coverage has focused on how the 2024 Windows outage and subsequent discount packages hit near-term revenue, even as ARR growth and customer interest stayed strong.
- Restructuring: The 5% workforce cut is generally framed as a profitability and focus move, with management reaffirming full-year guidance—a subtle vote of confidence in the medium term.
Net-net, the news tone is slightly cautious (“guidance missteps, valuation rich”) but fundamentally bullish (“category leader, AI-levered, taking share”).
Social / retail sentiment
In recent Reddit and Stocktwits chatter:
- A lot of “elite business, can’t wait to buy lower” versus “this is going to $800 someday” energy.
- Sentiment trackers show elevated mention volume and generally bullish skew, but nothing like a full-blown meme frenzy.
- There is also visible frustration from some holders over the earlier guidance-driven sell-offs and the outage optics, which is exactly why the near-term skew leans put-heavy.
Put together, sentiment looks like:
“Bullish long-term, annoyed short-term, and very focused on what management says about FY26 and post-outage churn.”
Guidance Scenarios (Where the Real Risk Lives)
The market appears to be going in expecting strong guidance—not because a blowout is guaranteed, but because investors want clear evidence that the worst of the outage/discount drag is behind the company. That’s exactly why anything less can hurt.
Here’s one way to frame the tree:
Base case (most likely – anchor scenario)
- Quarter: Clear beat vs $0.94 / $1.21B on ARR and operating leverage.
- Guidance:
- Q4 and FY26 ranges tightened or nudged up modestly.
- Management talks about post-outage churn stabilizing and CCP discount impact fading as expected.
- Stock reaction:
- With vol priced at ~7.4%, the reaction likely lands closer to a 5–7% up move, putting CRWD back in the $530–540 zone, but still shy of the highs.
Bull case (less likely but powerful)
- Quarter: Big beat with ARR re-accelerating, particularly in next-gen SIEM and cloud security.
- Guidance:
- FY26 revenue and EPS guide taken up enough that growth looks comfortably above 20% with margin expansion.
- Clear messaging that outage-related discounts are largely behind the company.
- Stock reaction:
- A double-digit squeeze (+10–15%) is plausible, attacking or even making new highs as shorts and hedged longs unwind protection and chase upside.
Bear case (the main risk)
- Quarter: The company might still beat on EPS and revenue, but:
- Billings/ARR decelerate more than expected, or
- FY26 guidance stays cautious and doesn’t show the recovery trajectory the Street wants.
- Stock reaction:
- With the bar set to “strong,” merely inline or conservative guidance could drive a 5–10% down move, especially if commentary hints at pricing pressure or slower net-new ARR.
A rough probability weighting:
- Base: 50–55%
- Bull: 20–25%
- Bear: 20–25%
That distribution supports a mild upside skew in expected move, but with material downside if guidance disappoints again.
Trade Framework (Not Advice, Just Ways to Express a View)
This is not personalized advice—just examples of how earnings-focused traders might structure trades relative to the current tape and implied move.
1) Directional long: Front-week call spread into and through earnings
Idea: Express the bullish but not euphoric view using a 12/5 call spread centered around the $505–550 zone.
- Example structure: Buy 12/5 505 calls, sell 12/5 550 calls.
- Rationale:
- 505 is basically ATM.
- 550 lines up with a visible call OI “wall” in the front week, which is a natural upside reference.
- Thesis: This targets a move toward the upper half of the implied range without paying for an open-ended rip to $600+.
This lines up with:
- Hedged-bullish tape,
- Rich short-dated vol, and
- A view that realized move may be slightly less than implied but skewed to the upside.
2) Vol play: Short-vol with wings (iron condor) for “good but not insane” outcomes
For traders who think 7–8% is too rich for a name that might move closer to 5–6% most of the time:
- One approach is a 12/5 iron condor with short strikes just outside the implied move (for instance, roughly ±8–9% from spot) and far wings.
- The idea:
- Sell premium where front-week IV (~90–95%) is well above realized (~35–38%).
- Use wings to cap tail risk in case of a guidance shock.
This works best if:
- The view is that the options market is slightly overpaying for disaster scenarios, and
- The trader is comfortable with event risk and the margin requirements.
3) Hedge / contrarian: Put spread for guidance-shock risk
For long-only holders worried about another guidance-driven drawdown:
- A 12/5 put spread around the 475/450 area lines up with where there has been meaningful downside put flow.
- This structure:
- Provides defined-risk downside exposure.
- Offers a way to monetize further guidance disappointment if management stays conservative or telegraphs more pricing pressure.
This matches the tape’s tail-hedge behavior—joining the cohort that is willing to pay up for protection in a rich, high-expectation name.
4) Longer-term expression: LEAP call spreads with short-dated premium overlay
For investors who like CRWD’s multi-year story but dislike paying peak vol for one print:
- The LEAP board (2027–2028) shows call-tilted OI and more normal IV levels in the high-30s to low-40s.
- One framework:
- Buy a 2027 or 2028 call spread (e.g., 550/700), expressing the secular growth view.
- Periodically sell short-dated calls or spreads against it around big events when front-week vol spikes (like this earnings).
This takes advantage of:
- Term-structure contango (front-week vol vs long-dated),
- The call-heavy LEAP positioning already on the tape,
- And the idea that CrowdStrike’s platform + AI + SIEM story is structurally stronger than whatever one quarter’s guidance says.
Risks & What Would Change the View
Key ways this call could be wrong:
-
Another guidance shock.
If management keeps leaning conservative on FY26 or points to more lingering outage discounts than expected, the stock can easily move down more than the implied 7–8%, and directional long ideas look poor. -
Macro / security-budget tightening.
Signs that CIOs are pulling back on security spend or that competition is forcing sustained pricing pressure would undermine the long-term thesis and make the current P/S multiple harder to defend. -
Churn and competitive displacement.
Any credible data points that key enterprise customers are switching to rivals (PANW, ZS, MSFT, etc.) in meaningful numbers would be a big negative, especially after the outage. -
Regulatory or legal escalation from the outage.
The Delta lawsuit and other fallout are already known, but if damages or regulatory actions end up higher than expected, that could compress the multiple further. -
Factor / sentiment risk.
CRWD trades like a high-beta, high-multiple AI/cyber growth name. A broad de-rating in expensive growth, even with good company-specific news, could cap upside or even drag it lower.
Final Thoughts
CrowdStrike heads into this print as a category-defining cybersecurity name with strong fundamentals, a checkered year on guidance, and a very rich valuation.
The options market is essentially saying:
- “We’re braced for a big move, but we’re not in panic mode.”
- “The long-term story is attractive, but some insurance into the print seems prudent.”
The base case is:
- Beat on the quarter, “strong enough” guidance, and an upward reaction that likely undershoots the full implied move, with realized action gravitating toward the mid-single digits.
In other words: a hedged-bullish setup with guidance as the main joker in the deck.