Industry Overview - The cybersecurity market is projected to witness a CAGR of 12.63% from 2025 to 2030, driven by the rise of complex attacks such as credential theft and social engineering [2] Company Profiles CrowdStrike - CrowdStrike specializes in endpoint protection and extended detection and response (XDR) through its Falcon platform, which is recognized as the industry's first multi-tenant, cloud-native security solution [4] - The Falcon platform offers 29 cloud modules categorized under Endpoint Security, Security & IT Operations, and Threat Intelligence, with subscription-based sales increasing from 72% in fiscal 2017 to 95% in fiscal 2025 [5] - Despite robust revenue growth, CrowdStrike's growth rate has decelerated from over 35% year-over-year until fiscal 2024 to 29% in fiscal 2025, with further estimates suggesting a decline to around 21% for fiscal 2026 and 2027 [6] - Rising costs are a concern, with R&D expenses increasing 12-fold and S&M expenses nearly ninefold to $1.52 billion in fiscal 2025 from $173 million in fiscal 2019 [7] - The Zacks Consensus Estimate for CrowdStrike's fiscal 2026 earnings indicates a year-over-year decline of 10.9% [8] Qualys - Qualys is a leading provider of Vulnerability Management, Detection and Response (VMDR) solutions, with a growing customer base and a net dollar retention rate of 104% [11] - The company has expanded its portfolio with new product launches, including the Risk Operations Center and enhancements to its TotalAI solution [12] - Qualys' channel partner program has driven revenue growth, with channel revenues increasing 17% year-over-year compared to 4% growth from direct customers [13] - International revenue growth is at 15% year-over-year, representing 43% of total revenues, allowing for organic expansion without acquisition costs [14] - The Zacks Consensus Estimate for Qualys' 2025 earnings is pegged at $6.35 per share, indicating a year-over-year increase of 3.6% [14] Valuation and Performance - Year-to-date, CrowdStrike shares have appreciated 25.1%, while Qualys shares have declined by 7.9% [17] - Qualys is trading at a forward sales multiple of 6.82X, below the industry average of 11.97X, while CrowdStrike is trading at a forward sales multiple of 19.98X, indicating overvaluation [20] - Qualys holds a Zacks Rank 1 (Strong Buy), making it a more attractive investment compared to CrowdStrike, which has a Zacks Rank 4 (Sell) [24]

Core Insights - CrowdStrike (CRWD) and CyberArk Software (CYBR) are prominent U.S.-based cybersecurity firms focusing on protecting enterprises from digital threats, with CRWD specializing in endpoint protection and XDR, while CYBR leads in identity security and privileged access management [1][2] Industry Overview - The cybersecurity market is expected to grow at a CAGR of 12.63% from 2025 to 2030, driven by the rise of complex attacks such as credential theft and social engineering [2] CrowdStrike Analysis - CrowdStrike's Falcon platform is recognized as the first multi-tenant, cloud-native intelligent security solution, securing various environments and endpoints [4] - The platform offers 29 cloud modules under a SaaS subscription model, with subscription-based sales increasing from 72% in fiscal 2017 to 95% in fiscal 2025 [5] - Despite its growth, CrowdStrike faces challenges due to negative customer sentiment following a global IT outage in July 2024, leading to profitability compression [6] - The company's upsell into existing customers has slowed, and the churn rate remains moderate, contributing to a projected 10.94% decline in fiscal 2026 earnings [7][9] - Zacks Consensus Estimates for CrowdStrike's earnings indicate a year-over-year decline of 20.19% for the current quarter and 10.94% for the current year [8] CyberArk Analysis - CyberArk is a leader in identity security, focusing on privileged access management and Zero Trust capabilities, aligning with industry trends [10] - The company has strengthened its position through acquisitions, including Venafi for $1.54 billion and Zilla Security for $165 million, enhancing its machine-to-machine security capabilities [11] - CyberArk is advancing in agentic AI with its Secure AI Agent solution, expected to be available to customers later this year [12] - The strong demand environment and focus on portfolio strengthening are driving CyberArk's financial growth, with a projected 26.4% year-over-year growth in earnings for 2025 [13][9] Price Performance and Valuation - Year-to-date, CrowdStrike shares have increased by 39.1%, while CyberArk shares have risen by 15.8% [15] - CyberArk trades at a forward sales multiple of 13.07X, below the industry average of 14.34X, while CrowdStrike trades at a higher multiple of 22.57X, indicating overvaluation [17] Investment Outlook - CyberArk is viewed as a more attractive investment option due to its robust growth, successful acquisitions, and innovation in identity and AI security, while CrowdStrike is dealing with reputational damage and profitability challenges [20] - CyberArk holds a Zacks Rank 1 (Strong Buy), compared to CrowdStrike's Zacks Rank 3 (Hold), suggesting a stronger investment case for CyberArk [21]