CrowdStrike vs SentinelOne: Which Cybersecurity Stock Will Outperform in 2025?

Core Insights - The cybersecurity industry is currently experiencing significant shifts due to a recent outage at CrowdStrike, which has led to legal actions and competitive maneuvers from rival companies like SentinelOne [1][2][12]. Company Performance - CrowdStrike reported a revenue increase of 29% and subscription revenue growth of 31% in Q3, with an annual recurring revenue (ARR) rise of 27%, despite the negative impact from customer compensation packages related to the outage [16]. - SentinelOne achieved a revenue growth of 28% last quarter and a 29% increase in ARR, forecasting a 27% revenue growth for its fiscal Q4 [4][6]. Competitive Landscape - SentinelOne is capitalizing on CrowdStrike's outage by attracting new customers, including a Fortune 50 client and various government entities, marking its highest number of large enterprise displacements [2]. - The company is also seeing strong demand for its Purple AI solution, which allows analysts to conduct complex threat hunts using natural language queries, with its attach rate doubling from the previous quarter [3]. Strategic Partnerships - SentinelOne has secured a significant opportunity with Lenovo, which will pre-install its Singularity Platform on all new PCs sold, potentially reaching a market of approximately 59 million PCs sold last year [5][8]. Valuation Comparison - SentinelOne is trading at a forward price-to-sales (P/S) ratio of 7.5x, significantly lower than CrowdStrike's 19.4x, despite both companies experiencing similar revenue growth rates [6][7]. Future Outlook - The cybersecurity sector is expected to continue evolving, with CrowdStrike positioned to benefit from the trend of consolidating cybersecurity services on a single platform [14]. - SentinelOne is anticipated to outperform in 2025 due to its lower valuation, strong growth prospects, and new opportunities arising from its partnership with Lenovo [8].