CrowdStrike(CRWD) The Motley Fool·2025-04-11 17:25Core Viewpoint - The recent rally in shares of cybersecurity companies CrowdStrike, Palo Alto Networks, and Fortinet is attributed to a 90-day pause on proposed tariffs and positive company-specific news, with respective stock increases of 13%, 6%, and 13% [1] Group 1: Company Performance - CrowdStrike, Palo Alto Networks, and Fortinet reported sales growth between 14% and 25% in their latest quarters, showcasing their status as both growth and defensive stocks [3] - CrowdStrike's newer products for identity protection, cloud security, and security information management saw growth rates between 70% and 140% year-over-year [7] - Palo Alto Networks achieved sales growth of 14%, remaining performance obligations (RPO) growth of 21%, and next-generation annual recurring revenue (ARR) growth of 37% in its latest quarter [9] - Fortinet has delivered 30% annualized returns since its IPO in 2009, maintaining a strong position in the firewall niche alongside Palo Alto [11] Group 2: Market Trends - A survey by Red Canary indicated that 63% of companies increased their cybersecurity spending, yet only 37% felt it was sufficient for complete security [4] - The need for cybersecurity solutions is expected to grow, particularly with the rise of AI threats, as 62% of security leaders reported that AI makes it harder to ensure business safety [5] Group 3: Investment Considerations - CrowdStrike is projected to reach 3.9 billion today, despite its current high valuation of 84 times free cash flow [7] - Palo Alto Networks' shift to a platform model has shown early success, and if sales and free cash flow growth align with its 21% growth in RPOs, it could be a strong investment at 40 times free cash flow [10] - Fortinet is noted for better shareholder value protection, having reduced its share count by 5% over the last five years, compared to increases in share counts for CrowdStrike and Palo Alto [12][13]