Key Takeaways
- CrowdStrike offers stronger growth, but its valuation remains extremely stretched.
- Fortinet combines positive EPS revisions with accelerating fundamentals and robust free cash flow.
- After extended YTD rallies, CRWD and FTNT have both hit fresh 52-week highs.
Cybersecurity stocks continue to benefit from rising enterprise security spending as cloud adoption, artificial intelligence, and increasingly sophisticated cyber threats expand the need for protection.
CrowdStrike (CRWD – Free Report) ) and Fortinet (FTNT – Free Report) ) have been among the industry’s strongest performers, with both stocks hitting fresh 52-week highs on Tuesday.
At these elevated levels, their growth outlooks, valuations, and earnings estimate trends can help determine which looks more attractive.
Image Source: Zacks Investment Research
CrowdStrike’s Impressive Growth
CrowdStrike continues to build momentum across its cloud-native Falcon cybersecurity platform, with AI security, identity protection, cloud security, and next-generation Security Information and Event Management (SIEM) driving growth.
Most recently, Q2 revenue increased 26% year over year to $1.47 billion, while annual recurring revenue (ARR) rose 25% to $5.84 billion. More impressively, net new ARR jumped 51% to a record $333 million, prompting CrowdStrike to raise its full-year net new ARR growth outlook to roughly 34%.
The Zacks Consensus Estimate calls for CrowdStrike’s current fiscal 2027 earnings to rise 35%, followed by a 28% increase in FY28 to $1.61 per share. However, EPS revisions have recently been relatively stagnant, while CRWD’s valuation has become increasingly stretched following its massive rally.
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Fortinet’s Fundamentals Accelerate
Fortinet’s momentum has been driven by accelerating demand for its FortiGate firewalls, Secure Access Service Edge (SASE) offerings, and expanding AI-security portfolio as enterprises upgrade networks to handle increasingly complex workloads.
Second-quarter revenue surged 26% to $2.05 billion, with product revenue jumping 52% and billings rising 33%. Fortinet subsequently raised its 2026 revenue guidance to $8.02-$8.18 billion, representing roughly 19% growth at the midpoint. Notably, Fortinet’s free cash flow more than tripled during Q2 to $966 million.
The Zacks Consensus Estimate calls for FY26 EPS to climb 25%, with 11% earnings growth projected next year to $3.85 per share. More importantly, FY26 and FY27 EPS estimates have each increased more than 1% over the past 30 days.
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Valuation Favors Fortinet
Along with a more favorable trend of EPS revisions, valuation also favors Fortinet, with FTNT trading at 55X forward earnings, while CRWD trades at more than 200X. FTNT also trades at 17X forward sales compared to CRWD’s 47X.
Neither cybersecurity leader is cheap following a tremendous rally, but Fortinet’s forward P/E is roughly in line with the Zacks Security industry’s elevated average and its P/S ratio isn’t a far-stretched premium to its peers’ average of 10X.
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Bottom Line
CrowdStrike arguably offers the stronger pure-growth story, with Falcon Flex, AI security, and accelerating ARR providing plenty of long-term upside. That said, after CRWD’s enormous rally, its premium valuation and muted earnings estimate revisions warrant more caution.
Keeping that in mind, Fortinet stock currently sports a Zacks Rank #2 (Buy), while CrowdStrike lands a Zacks Rank #5 (Strong Sell).
Combined with positive earnings estimate revisions, accelerating fundamentals, robust free cash flow generation, and a significantly lower valuation, Fortinet appears to be the more attractive cybersecurity stock near 52-week highs. In contrast, CrowdStrike’s risk-reward profile appears less favorable at current levels.
