Is CrowdStrike Holdings, Inc. overvalued or undervalued?

As of 4 March 2025, the valuation grade for CrowdStrike Holdings, Inc. has moved from attractive to risky, indicating a shift in perception regarding its financial health and market position. The company appears to be overvalued, as evidenced by its significant negative valuation ratios, including an EV to EBITDA of -5851.47 and a Price to Book Value of 33.83, which suggest that the stock is trading at an unsustainable premium relative to its underlying assets and earnings potential.
In comparison to its peers, CrowdStrike's P/E ratio is not applicable due to its loss-making status, while ServiceNow, Inc. and Palo Alto Networks, Inc. are trading at much higher P/E ratios of 117.63 and 118.98, respectively. This stark contrast highlights the challenges CrowdStrike faces in justifying its current valuation. Despite recent strong stock performance, with a 1Y return of 88.17% compared to the S&P 500's 17.14%, the underlying financial metrics raise concerns about the sustainability of such growth, reinforcing the view that the stock is overvalued.