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CRWD vs. PANW: Which Cybersecurity Stock Has an Edge Right Now?
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Key Takeaways
CrowdStrike's Falcon Flex ARR topped $1.69 billion in Q4 FY26, growing more than 120% year over year.
PANW faces higher integration costs and EPS pressure after CyberArk and Chronosphere deals.
CrowdStrike's fiscal 2027 revenues and EPS are projected to grow faster than Palo Alto Networks.
CrowdStrike (CRWD - Free Report) and Palo Alto Networks (PANW - Free Report) are both at the forefront of the cybersecurity space, playing key roles in guarding organizations from extensive cyberattacks. While Palo Alto Networks focuses broadly on next-generation firewalls, cloud security and AI-driven threat detection, CrowdStrike specializes in endpoint protection and extended detection and response, offering AI-native cloud security through its Falcon platform.
Both CRWD and PANW are riding the key industry trends, driven by the mounting incidents of credential theft, remote desktop protocol breaches and social engineering-based strikes by malicious actors. However, from an investment point of view, one stock offers a more favorable outlook than the other right now. Let’s break down their fundamentals, growth prospects, market challenges and valuation to determine which stock offers a more compelling investment case.
The Case for CrowdStrike Stock
CrowdStrike provides its cybersecurity services mainly through its Falcon platform. CrowdStrike’s Falcon platform is renowned for being the industry’s first multi-tenant, cloud native, intelligent security solution. The Falcon platform helps secure workloads across on-premise, cloud-based and virtualized environments running on several endpoints, such as desktops, laptops, servers, virtual machines and IoT devices.
CrowdStrike’s cloud-based Falcon platform currently provides 33 cloud modules via a software-as-a-service subscription model that is categorized under three categories: Endpoint Security, Security & IT Operations and Threat Intelligence. The share of subscription-based sales to CrowdStrike’s total revenues grew from 72% in fiscal 2017 to 95% in fiscal 2026.
CrowdStrike’s Falcon Flex subscription model is becoming an important driver of its growth. Falcon Flex makes it easier for customers to access multiple modules of the Falcon platform through a single contract. This makes it easier for customers to deploy additional security products over time and expand their use of the Falcon platform, which has now become the company’s primary go-to-market model.
Annual recurring revenue (ARR) from Flex accounts crossed $1.69 billion, growing more than 120% year over year, in the fourth quarter of fiscal 2026, which shows strong adoption across enterprise customers. CrowdStrike now has more than 1,600 customers using the Flex model. In the fourth quarter alone, the company added more than 350 new Flex customers. Flex customers are also large accounts. On average, each Flex customer generates more than $1 million in ARR.
Falcon Flex is also helping CrowdStrike increase module adoption. Notable example during the fourth quarter includes a large enterprise software company. The customer initially started with CrowdStrike’s threat intelligence module, and is now using 25 different CrowdStrike modules after adopting the Falcon Flex model, committing to a total Falcon Flex contract value of $86 million. If adoption continues to rise, Falcon Flex could remain one of CrowdStrike’s most important contributors to its long-term growth.
The Case for Palo Alto Networks Stock
Palo Alto Networks remains a cybersecurity leader, offering solutions for network security, cloud security and endpoint solutions for customers who need full enterprise security support. Its next-generation firewalls and advanced threat detection technologies are widely recognized and adopted globally.
Palo Alto Networks’ wide range of innovative products, strong customer base and growing opportunities in areas like Zero Trust, Secure Access Service Edge (SASE) and private 5G security continue to support its long-term growth potential. For example, in the second quarter of fiscal 2026, SASE was Palo Alto Networks’ fastest-growing segment, with SASE Annual recurring revenues (ARR) increasing 40% year over year. Growth is mainly coming from customers who want to reduce the number of security tools they use.
However, PANW's near-term prospects are expected to be weighed down due to integration and acquisition-related costs. PANW recently completed two major acquisitions, which include its $25 billion CyberArk deal and $3.35 billion Chronosphere acquisition. As a result, PANW is incurring high integration-related costs, including onboarding employees, aligning go-to-market teams and integrating systems and operations.
Acquisition-related costs in the second quarter amounted to $24 million, a whopping increase from $5 million incurred in the prior quarter. These costs are expected to hurt the company's profitability before the benefits of synergies from acquisitions are fully realized.
Equity dilution effect is expected to significantly hurt PANW’s bottom line. In the second quarter of fiscal 2026, PANW issued 112 million shares as part of the CyberArk deal. This is expected to result in a significant equity dilution effect, hurting the company’s bottom-line results. Management expects fiscal 2026 earnings per share (EPS) to be in the range of $3.65-$3.70, down from its prior guidance of $3.80-$3.90.
CRWD vs. PANW: Which Has the Stronger Growth Outlook?
Both companies will benefit from the surging demand for cybersecurity, but CrowdStrike’s growth profile appears stronger in the near term.
The Zacks Consensus Estimate for CRWD’s current fiscal-year 2027 revenues and EPS indicates a year-over-year surge of 22.8% and 30%, respectively. For fiscal 2028, top and bottom lines are projected to grow 21.4% and 26.8%, respectively.
CrowdStrike
Image Source: Zacks Investment Research
In contrast, Palo Alto Networks’ fiscal 2026 estimates point to more modest growth, with revenues and EPS indicating a year-over-year increase of 22% and 10.8%, respectively. For fiscal 2027, top and bottom lines are both projected to grow 19.3% and 7.6%, respectively.
Palo Alto Networks
Image Source: Zacks Investment Research
Price Performance and Valuation of CRWD and PANW
Year to date, CrowdStrike shares have appreciated 26.7%, while Palo Alto Networks shares have gained 31.8%.
CRWD vs. PANW: YTD Price Return Performance
Image Source: Zacks Investment Research
Currently, Palo Alto Networks is trading at a forward sales multiple of 15.27X, lower than CrowdStrike’s forward sales multiple of 24.03X. CrowdStrike does seem pricey compared with Palo Alto Networks. However, CrowdStrike’s valuations also reflect higher growth expectations for the company.
CRWD vs. PANW: Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
Conclusion: CRWD Has an Edge Over PANW
Both CrowdStrike and Palo Alto Networks are key players in the cybersecurity space, but their near-term outlooks are quite different. CrowdStrike is witnessing strong adoption of its Falcon platform, which is helping the company win larger deals, increase module usage and drive higher recurring revenues.
Palo Alto Networks, on the other hand, faces near-term risks from rising integration costs due to large acquisitions, meaningful share dilution and a downward revision of EPS guidance for fiscal 2026. These could hurt PANW’s prospects in the near term.
Currently, CrowdStrike carries a Zacks Rank #3 (Hold), giving the stock a clear edge compared to Palo Alto Networks, which has a Zacks Rank #4 (Sell).
View the Zacks #1 Rank List
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CRWD vs. PANW: Which Cybersecurity Stock Has an Edge Right Now?
Key Takeaways
CrowdStrike (CRWD - Free Report) and Palo Alto Networks (PANW - Free Report) are both at the forefront of the cybersecurity space, playing key roles in guarding organizations from extensive cyberattacks. While Palo Alto Networks focuses broadly on next-generation firewalls, cloud security and AI-driven threat detection, CrowdStrike specializes in endpoint protection and extended detection and response, offering AI-native cloud security through its Falcon platform.
Both CRWD and PANW are riding the key industry trends, driven by the mounting incidents of credential theft, remote desktop protocol breaches and social engineering-based strikes by malicious actors. However, from an investment point of view, one stock offers a more favorable outlook than the other right now. Let’s break down their fundamentals, growth prospects, market challenges and valuation to determine which stock offers a more compelling investment case.
The Case for CrowdStrike Stock
CrowdStrike provides its cybersecurity services mainly through its Falcon platform. CrowdStrike’s Falcon platform is renowned for being the industry’s first multi-tenant, cloud native, intelligent security solution. The Falcon platform helps secure workloads across on-premise, cloud-based and virtualized environments running on several endpoints, such as desktops, laptops, servers, virtual machines and IoT devices.
CrowdStrike’s cloud-based Falcon platform currently provides 33 cloud modules via a software-as-a-service subscription model that is categorized under three categories: Endpoint Security, Security & IT Operations and Threat Intelligence. The share of subscription-based sales to CrowdStrike’s total revenues grew from 72% in fiscal 2017 to 95% in fiscal 2026.
CrowdStrike’s Falcon Flex subscription model is becoming an important driver of its growth. Falcon Flex makes it easier for customers to access multiple modules of the Falcon platform through a single contract. This makes it easier for customers to deploy additional security products over time and expand their use of the Falcon platform, which has now become the company’s primary go-to-market model.
Annual recurring revenue (ARR) from Flex accounts crossed $1.69 billion, growing more than 120% year over year, in the fourth quarter of fiscal 2026, which shows strong adoption across enterprise customers. CrowdStrike now has more than 1,600 customers using the Flex model. In the fourth quarter alone, the company added more than 350 new Flex customers. Flex customers are also large accounts. On average, each Flex customer generates more than $1 million in ARR.
Falcon Flex is also helping CrowdStrike increase module adoption. Notable example during the fourth quarter includes a large enterprise software company. The customer initially started with CrowdStrike’s threat intelligence module, and is now using 25 different CrowdStrike modules after adopting the Falcon Flex model, committing to a total Falcon Flex contract value of $86 million. If adoption continues to rise, Falcon Flex could remain one of CrowdStrike’s most important contributors to its long-term growth.
The Case for Palo Alto Networks Stock
Palo Alto Networks remains a cybersecurity leader, offering solutions for network security, cloud security and endpoint solutions for customers who need full enterprise security support. Its next-generation firewalls and advanced threat detection technologies are widely recognized and adopted globally.
Palo Alto Networks’ wide range of innovative products, strong customer base and growing opportunities in areas like Zero Trust, Secure Access Service Edge (SASE) and private 5G security continue to support its long-term growth potential. For example, in the second quarter of fiscal 2026, SASE was Palo Alto Networks’ fastest-growing segment, with SASE Annual recurring revenues (ARR) increasing 40% year over year. Growth is mainly coming from customers who want to reduce the number of security tools they use.
However, PANW's near-term prospects are expected to be weighed down due to integration and acquisition-related costs. PANW recently completed two major acquisitions, which include its $25 billion CyberArk deal and $3.35 billion Chronosphere acquisition. As a result, PANW is incurring high integration-related costs, including onboarding employees, aligning go-to-market teams and integrating systems and operations.
Acquisition-related costs in the second quarter amounted to $24 million, a whopping increase from $5 million incurred in the prior quarter. These costs are expected to hurt the company's profitability before the benefits of synergies from acquisitions are fully realized.
Equity dilution effect is expected to significantly hurt PANW’s bottom line. In the second quarter of fiscal 2026, PANW issued 112 million shares as part of the CyberArk deal. This is expected to result in a significant equity dilution effect, hurting the company’s bottom-line results. Management expects fiscal 2026 earnings per share (EPS) to be in the range of $3.65-$3.70, down from its prior guidance of $3.80-$3.90.
CRWD vs. PANW: Which Has the Stronger Growth Outlook?
Both companies will benefit from the surging demand for cybersecurity, but CrowdStrike’s growth profile appears stronger in the near term.
The Zacks Consensus Estimate for CRWD’s current fiscal-year 2027 revenues and EPS indicates a year-over-year surge of 22.8% and 30%, respectively. For fiscal 2028, top and bottom lines are projected to grow 21.4% and 26.8%, respectively.
CrowdStrike
Image Source: Zacks Investment Research
In contrast, Palo Alto Networks’ fiscal 2026 estimates point to more modest growth, with revenues and EPS indicating a year-over-year increase of 22% and 10.8%, respectively. For fiscal 2027, top and bottom lines are both projected to grow 19.3% and 7.6%, respectively.
Palo Alto Networks
Image Source: Zacks Investment Research
Price Performance and Valuation of CRWD and PANW
Year to date, CrowdStrike shares have appreciated 26.7%, while Palo Alto Networks shares have gained 31.8%.
CRWD vs. PANW: YTD Price Return Performance
Image Source: Zacks Investment Research
Currently, Palo Alto Networks is trading at a forward sales multiple of 15.27X, lower than CrowdStrike’s forward sales multiple of 24.03X. CrowdStrike does seem pricey compared with Palo Alto Networks. However, CrowdStrike’s valuations also reflect higher growth expectations for the company.
CRWD vs. PANW: Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
Conclusion: CRWD Has an Edge Over PANW
Both CrowdStrike and Palo Alto Networks are key players in the cybersecurity space, but their near-term outlooks are quite different. CrowdStrike is witnessing strong adoption of its Falcon platform, which is helping the company win larger deals, increase module usage and drive higher recurring revenues.
Palo Alto Networks, on the other hand, faces near-term risks from rising integration costs due to large acquisitions, meaningful share dilution and a downward revision of EPS guidance for fiscal 2026. These could hurt PANW’s prospects in the near term.
Currently, CrowdStrike carries a Zacks Rank #3 (Hold), giving the stock a clear edge compared to Palo Alto Networks, which has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.