Key Takeaways CrowdStrike’s Falcon Flex ARR grew 101% to $2.29 billion in Q2 fiscal 2027.Fortinet’s billings rose 29% to $2.34 billion, while SASE Firewall billings grew 31%. FTNT trades at 10.44X forward sales, well below CRWD’s 33.20X multiple.
CrowdStrike Holdings, Inc. (CRWD Quick QuoteCRWD – Free Report) and Fortinet, Inc. (FTNT Quick QuoteFTNT – Free Report) are well-known players in the cybersecurity domain. While CrowdStrike specializes in endpoint protection and extended detection and response, offering AI-native cloud security through its Falcon platform, Fortinet combines a variety of hardware and cloud-based security solutions.Both CRWD and FTNT are riding 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 StockCrowdStrike 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-premises, 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 34 cloud modules via a software-as-a-service subscription model that is categorized into 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.In the second quarter of fiscal 2027, Annual recurring revenues (ARR) from Flex accounts crossed $2.29 billion, up 101% year over year, which shows strong adoption across enterprise customers. In the second quarter of fiscal 2027, CrowdStrike added more than 935 Flex customers and ended the second quarter with over 2,900 customers who have adopted Falcon Flex.However, CrowdStrike’s recent quarterly reports have shown a deceleration in its growth rate. The company’s revenue growth, while still robust, is not as explosive as in previous years. CrowdStrike had enjoyed more than 35% year-over-year top-line growth through fiscal 2024. The growth rate decelerated to 29% in fiscal 2025 and to 22% in fiscal 2026. For fiscal 2027, CrowdStrike expects total revenues to be in the range of $5.991 billion to $6.011 billion. This indicates that the top-line growth is expected to stay around 25%, which is way lower than the explosive growth enjoyed by the company in previous years.The Case for FTNT StockFortinet is expanding its cybersecurity portfolio to address the growing security needs of enterprises adopting AI. As businesses deploy AI applications and infrastructure, they face new security risks, including AI-driven cyberattacks and vulnerabilities. Fortinet is positioning its network security platform as a key part of protecting these environments. During the third quarter of 2026, management identified AI, SASE and network upgrades as key drivers of customer demand.The company is expanding its AI security capabilities across four areas: network security, AI data centers, endpoint security and security operations. Fortinet recently launched its FortiGuard Inline AI Security Service, which turns FortiGate appliances into real-time AI security enforcement points. The service is designed to help enterprises monitor AI traffic, control access to applications and data, and protect against AI-related threats. For AI data centers, Fortinet offers FortiAIGate to secure GPU clusters and large language model infrastructure. Its SASE solutions extend protection to endpoints, while FortiSOC uses AI agents to automate the detection and response to security incidents.Fortinet is also seeing demand from customers expanding their AI infrastructure. During the third quarter of 2026, an AI company developing advanced models selected Fortinet for a seven-figure expansion. The customer deployed Fortinet’s high-end data center firewalls across five additional data centers after an initial deployment the previous year. This highlights the opportunity for Fortinet to secure large AI environments that require high network performance and protection. The company is also benefiting from broader demand for network security, with SASE Firewall billings growing 31% year over year in the third quarter of 2026.The growing demand for AI and network security solutions is supporting Fortinet’s overall business momentum. Total billings increased 29% year over year to $2.34 billion in the third quarter, while revenues grew 20% year over year. As enterprises continue to invest in AI infrastructure and strengthen their security systems, Fortinet’s expanding AI security portfolio could provide a major source of growth for the company.How do Earnings Estimates Compare for CRWD & FTNT?The Zacks Consensus Estimate for CRWD’s fiscal 2027 and 2028 EPS is pegged at $1.26 and $1.61, respectively. The estimates for fiscal 2027 and 2028 have remained unchanged over the past 30 days.Image Source: Zacks Investment ResearchThe Zacks Consensus Estimate for FTNT’s 2026 and 2027 EPS is pegged at $3.59 and $3.91, respectively. The estimates for 2026 and 2027 have been revised up by 5% and 1.6%, respectively, over the past 30 days.Image Source: Zacks Investment ResearchCRWD vs. FTNT: Price Performance and ValuationYear to date, shares of CRWD and FTNT have surged 68.6% and 57.1%, respectively.CRWD Vs. FTNT: YTD Price Return PerformanceImage Source: Zacks Investment ResearchCurrently, FTNT is trading at a forward sales multiple of 10.44X, significantly lower than CRWD’s forward sales multiple of 33.20X. FTNT’s reasonable valuation makes it more attractive for investors looking for value and stability.CRWD vs. FTNT: Forward 12-Month P/S RatioImage Source: Zacks Investment ResearchConclusion: FTNT Has an Edge Over CRWDBoth CrowdStrike and Fortinet are key players in the cybersecurity space, but CrowdStrike is witnessing a slowdown in its sales growth. In contrast, Fortinet shows steadier execution, where the company is witnessing strong demand for AI security, SASE and network security solutions. Further, FTNT’s reasonable valuation offers some downside protection as well, giving the stock a clear edge over CRWD, particularly for investors seeking exposure to cybersecurity growth at a fair price.Currently, Fortinet carries a Zacks Rank #3 (Hold), giving the stock a clear edge over CrowdStrike, which has a Zacks Rank #4 (Sell).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
——————————————————-
Click Here For The Original Source.
