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Can Strong Momentum in Next-Gen SIEM Drive CRWD's Platform Expansion?
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Key Takeaways
CrowdStrike's Next-Gen SIEM ARR topped $695 million, rising about 60% year over year in Q2 FY27.
Falcon's cloud-native architecture helps customers enable SIEM without deploying another agent.
An eight-figure Falcon Flex deal replaced a legacy SIEM, while GSI business grew nearly 50% year over year.
CrowdStrike (CRWD - Free Report) is seeing strong demand for its Next-Gen Security Information and Event Management (SIEM) platform as enterprises look to modernize their security operations. In the second quarter of fiscal 2027, Next-Gen SIEM ending annual recurring revenue (ARR) surpassed $695 million and was up about 60% year over year. The business also delivered record net new ARR during the second quarter of fiscal 2027.
Management said both new and existing customers are increasingly standardizing on Falcon as the operating system of the security operations center. The growth is being supported by strong adoption of the platform's first-party data and its cloud-native architecture. Since customer data is already available within the Falcon platform, enterprises can enable the SIEM without having to deploy another agent, which can make implementation faster.
This structure is leading to larger deals, where CrowdStrike is using its SIEM platform to replace legacy security products. A key customer win shared in the second quarter includes an eight-figure Falcon Flex deal, where a major American power provider replaced a legacy acquired SIEM with CrowdStrike’s next-gen SIEM, citing technical, speed and economic benefits.
The company is also seeing strong demand for SIEM transformations through its partner ecosystem. CrowdStrike’s GSI business grew nearly 50% year over year, with much of that activity focused on next-gen SIEM transformations and vulnerability management as customers are focused on consolidating security tools to get better outcomes at a lower cost. With record net new ARR in the second quarter and growing adoption among both new and existing customers, Next-Gen SIEM is becoming an increasingly important part of CrowdStrike’s broader platform strategy.
The Zacks Consensus Estimate for fiscal 2027 and 2028 indicates revenue growth of around 24.6% and 22.4%, respectively.
How Competitors Fare Against CRWD
Competitors like Palo Alto Networks (PANW - Free Report) and SentinelOne (S - Free Report) are also gaining ground through platform expansion and AI innovation.
In the third quarter of fiscal 2026, Palo Alto Networks saw robust growth in its Next-Gen Security ARR, which increased 60% year over year. The growth was driven by increased customer adoption of PANW’s advanced cybersecurity offerings, including its AI-driven XSIAM platform, SASE and software firewalls.
Though comparatively a small competitor, SentinelOne posted second-quarter fiscal 2027 year-over-year growth of 22% in its ARR. The growth was fueled by the rising adoption of SentinelOne’s AI-first Singularity platform and Purple AI.
CRWD’s Price Performance, Valuation and Estimates
Shares of CrowdStrike have jumped 123.4% in the year-to-date period compared with the Zacks Security industry’s return of 95.7%.
CRWD YTD Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, CrowdStrike trades at a forward price-to-sales ratio of 39.16, significantly higher than the industry’s average of 19.34. The Zacks Value Score of F suggests that CRWD stock is overvalued.
CRWD Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for CrowdStrike’s fiscal 2027 and 2028 earnings indicates year-over-year growth of 35.5% and 28.2%, respectively. The estimates for fiscal 2027 and 2028 have been revised up by 8 cents and 4 cents, respectively, over the past 30 days.
Image Source: Zacks Investment Research
CrowdStrike currently carries a Zacks Rank #4 (Sell).
View the Zacks #1 Rank List
Image: Shutterstock
Can Strong Momentum in Next-Gen SIEM Drive CRWD's Platform Expansion?
Key Takeaways
CrowdStrike (CRWD - Free Report) is seeing strong demand for its Next-Gen Security Information and Event Management (SIEM) platform as enterprises look to modernize their security operations. In the second quarter of fiscal 2027, Next-Gen SIEM ending annual recurring revenue (ARR) surpassed $695 million and was up about 60% year over year. The business also delivered record net new ARR during the second quarter of fiscal 2027.
Management said both new and existing customers are increasingly standardizing on Falcon as the operating system of the security operations center. The growth is being supported by strong adoption of the platform's first-party data and its cloud-native architecture. Since customer data is already available within the Falcon platform, enterprises can enable the SIEM without having to deploy another agent, which can make implementation faster.
This structure is leading to larger deals, where CrowdStrike is using its SIEM platform to replace legacy security products. A key customer win shared in the second quarter includes an eight-figure Falcon Flex deal, where a major American power provider replaced a legacy acquired SIEM with CrowdStrike’s next-gen SIEM, citing technical, speed and economic benefits.
The company is also seeing strong demand for SIEM transformations through its partner ecosystem. CrowdStrike’s GSI business grew nearly 50% year over year, with much of that activity focused on next-gen SIEM transformations and vulnerability management as customers are focused on consolidating security tools to get better outcomes at a lower cost. With record net new ARR in the second quarter and growing adoption among both new and existing customers, Next-Gen SIEM is becoming an increasingly important part of CrowdStrike’s broader platform strategy.
The Zacks Consensus Estimate for fiscal 2027 and 2028 indicates revenue growth of around 24.6% and 22.4%, respectively.
How Competitors Fare Against CRWD
Competitors like Palo Alto Networks (PANW - Free Report) and SentinelOne (S - Free Report) are also gaining ground through platform expansion and AI innovation.
In the third quarter of fiscal 2026, Palo Alto Networks saw robust growth in its Next-Gen Security ARR, which increased 60% year over year. The growth was driven by increased customer adoption of PANW’s advanced cybersecurity offerings, including its AI-driven XSIAM platform, SASE and software firewalls.
Though comparatively a small competitor, SentinelOne posted second-quarter fiscal 2027 year-over-year growth of 22% in its ARR. The growth was fueled by the rising adoption of SentinelOne’s AI-first Singularity platform and Purple AI.
CRWD’s Price Performance, Valuation and Estimates
Shares of CrowdStrike have jumped 123.4% in the year-to-date period compared with the Zacks Security industry’s return of 95.7%.
CRWD YTD Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, CrowdStrike trades at a forward price-to-sales ratio of 39.16, significantly higher than the industry’s average of 19.34. The Zacks Value Score of F suggests that CRWD stock is overvalued.
CRWD Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for CrowdStrike’s fiscal 2027 and 2028 earnings indicates year-over-year growth of 35.5% and 28.2%, respectively. The estimates for fiscal 2027 and 2028 have been revised up by 8 cents and 4 cents, respectively, over the past 30 days.
Image Source: Zacks Investment Research
CrowdStrike currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.