Cybersecurity Stocks: CrowdStrike vs Palo Alto Networks

Investors should pay close attention to cybersecurity as companies enhance protections against threats. While both CrowdStrike and Palo Alto Networks provide crucial endpoint protection services, their performance in revenue growth and profitability differs significantly.

Date: 08-02-2025

AI Rating: 6

**Earnings Per Share (EPS):** The report does not provide any specific information regarding the EPS for either CrowdStrike or Palo Alto Networks. Therefore, this subject is not analyzed further here. **Revenue Growth:** The analysis highlights different aspects of revenue growth between the two companies. CrowdStrike reported a total revenue of $1 billion, marking a 29% increase year-over-year. Additionally, its Annual Recurring Revenue (ARR) stands at $4.02 billion, showing a 27% increase year-over-year. On the other hand, Palo Alto Networks' next-gen platform ARR rose by 40% year-over-year to $4.5 billion, although its overall revenue growth was only 14%, totaling $2.1 billion. This paints a complex picture of revenue growth with both companies exhibiting strengths and weaknesses. **Net Income:** The report mentions that CrowdStrike is not profitable currently, while Palo Alto Networks is profitable due to its more mature business model, which is bolstered by its legacy business. **Profit Margins:** CrowdStrike is working towards profitability and does not have a net profit margin currently. In contrast, Palo Alto Networks benefits from its legacy business, which helps generate a profit, providing it with a stronger position in this area of comparison. **Free Cash Flow (FCF):** Palo Alto Networks has a stronger free cash flow margin of 37%, compared to CrowdStrike's margin of 29%. This ranking places Palo Alto as a more favorable investment in this regard. **Return on Equity (ROE):** There is no mention of ROE in the report, so there is no analysis available regarding this measure. In summary, while CrowdStrike showcases robust revenue growth in its core business segments, it lacks profitability compared to Palo Alto Networks. Investors may want to weigh these factors when making decisions regarding the cybersecurity stocks under comparison. Both stocks appear promising for different reasons, but Palo Alto currently holds a stronger position based purely on profitability and cash flow metrics.

Stocks: CRWD PANW