CrowdStrike vs. Fortinet: Which Cybersecurity Stock Is the Better Buy?

Core Insights - CrowdStrike and Fortinet are leading companies in the cybersecurity sector, focusing on protecting organizations from cyberattacks [1][2] - The cybersecurity market is projected to grow at a CAGR of 12.45% from 2025 to 2030, driven by increasing cyber threats [2] CrowdStrike Overview - CrowdStrike's Falcon platform is a cloud-native security solution that secures various environments and endpoints [4] - The platform offers 29 cloud modules under a SaaS subscription model, with subscription sales increasing from 72% in fiscal 2017 to 95% in fiscal 2025 [5] - The Falcon Flex subscription model has been a key driver of customer growth, with 48% of subscription customers using six or more modules by the end of Q2 fiscal 2026 [6] - In Q2, CrowdStrike added $221 million in net new annual recurring revenues (ARR), bringing total ARR to $4.66 billion, a 20% increase year-over-year [7] - The company expects revenues for fiscal 2026 and 2027 to be $4.78 billion and $5.80 billion, respectively, indicating a year-over-year increase of around 21% [9][10] Fortinet Overview - Fortinet's Q3 2025 results showed a 14% year-over-year growth in both billings and revenues, with a record operating margin of 37% [11] - The company's SASE business saw significant growth, with Unified SASE billings increasing by 19% and FortiSASE billings rising over 100% [12] - Fortinet's product revenues grew by 18%, driven by demand for hardware upgrades and operational technology security [13] - However, service revenues grew only 13%, indicating slower growth compared to product revenues [14] - For full-year 2025 and 2026, Fortinet's revenue estimates are $6.75 billion and $7.50 billion, reflecting year-over-year increases of approximately 13.3% and 11% [15][16] Price Performance and Valuation - Year-to-date, CrowdStrike shares have increased by 43.4%, while Fortinet shares have decreased by 16.6% [17] - CrowdStrike is trading at a forward sales multiple of 21.97, while Fortinet is at 7.91, indicating higher growth expectations for CrowdStrike [19] - CrowdStrike's strong revenue visibility and growth prospects justify its higher valuation compared to Fortinet [22] Conclusion - CrowdStrike is recommended as a strong buy due to its leadership in the cybersecurity space and robust growth potential, while Fortinet is suggested for holding or waiting for better entry points [22][23]