Free Trial

Top 2 Cybersecurity Stocks Booming in an Age of Rising Threats

Hands of businesswoman using smartphone and laptop in blurry office with double exposure of immersive data protection interface

Key Points

  • Cybersecurity is a rapidly growing industry with strong investment potential driven by increasing digitalization and sophisticated cyber threats.
  • CrowdStrike and Zscaler are leading cybersecurity companies with distinct strengths and growth drivers, offering investors diverse investment opportunities.
  • Diversification across cybersecurity sub-sectors can mitigate risk and enhance returns for investors seeking exposure to this dynamic industry.
  • 5 stocks we like better than CrowdStrike

The cybersecurity sector is rapidly transforming, marked by an increasingly sophisticated and persistent threat from cybercriminals. As businesses become increasingly reliant on digital infrastructure, the consequences of a successful cyberattack are becoming more severe, impacting financial stability, operational continuity, and corporate reputation. This environment presents a compelling investment opportunity for investors seeking exposure to a resilient and rapidly growing industry.

Key Trends Driving Cybersecurity Demand

Remote and hybrid work models have significantly expanded businesses' attack surfaces. With employees accessing corporate networks from diverse locations and devices, traditional security perimeters are no longer sufficient to protect against evolving threats. This shift has amplified the need for robust security solutions that can adapt to distributed work environments and enforce Zero-Trust principles.

The increasing reliance on cloud computing presents unique challenges for cybersecurity. Businesses are migrating sensitive data and critical applications to the cloud, creating a larger attack surface and requiring a fundamental change in security strategies. Cloud-native security solutions that protect data across multiple platforms are becoming increasingly essential.

The rise of sophisticated, state-sponsored cyberattacks, often referred to as Advanced Persistent Threats (APTs), demands advanced threat detection and response solutions. These targeted attacks leverage persistent surveillance and sophisticated malware to infiltrate networks, steal sensitive data, or disrupt critical operations. Businesses require sophisticated security technologies to effectively detect and respond to these evolving threats.

CrowdStrike Holdings, Inc.: A Leader in Endpoint Security

CrowdStrike Today

CrowdStrike Holdings, Inc. stock logo
CRWDCRWD 90-day performance
CrowdStrike
$371.32
+0.89 (+0.24%)
(As of 07/12/2024 ET)
52-Week Range
$140.52
$398.33
P/E Ratio
700.62
Price Target
$382.35

CrowdStrike Holdings, Inc. NASDAQ: CRWD is a leading provider of cloud-native security solutions specializing in endpoint security, threat intelligence, and cloud workload protection. The company's core product, the Falcon platform, utilizes artificial intelligence (AI) and machine learning (ML) to provide comprehensive endpoint protection and threat detection capabilities. CrowdStrike's Falcon platform is designed to be highly scalable, deployable, and effective in both on-premises and cloud environments.


CrowdStrike's recent performance demonstrates its strong growth trajectory. The company's earnings report for the first quarter of fiscal year 2025 revealed that the company reported a 33% year-over-year increase in Annual Recurring Revenue (ARR), reaching $3.65 billion. This growth reflects the company's ability to capture market share and attract new customers, driven by its strong brand reputation and innovative product offerings.

CrowdStrike's financial highlights reveal a profitable and cash-generative business model. In the first quarter of fiscal 2025, the company reported GAAP net income of $42.8 million, a significant improvement from the previous year. This profitability is supported by a high subscription gross margin, demonstrating the efficiency and scalability of its cloud-based platform.

CrowdStrike Holdings, Inc. (CRWD) Price Chart for Sunday, July, 14, 2024

Several factors drive CrowdStrike's growth, including the strong demand for its endpoint security solutions, continuous product innovation, and strategic partnerships. The company continues to expand its product offerings, adding new features and capabilities to address evolving threats. CrowdStrike's strategic partnerships with major technology players enable the company to reach a broader customer base and integrate its solutions seamlessly into existing IT infrastructure.

CrowdStrike's current valuation reflects its strong performance and growth potential. The company's price-to-earnings ratio (P/E) is currently elevated, indicating investor confidence in its prospects. However, the high valuation also introduces a degree of risk, as any slowdown in growth or changes in market conditions could negatively impact CrowdStrike’s stock price.

Investing in CrowdStrike presents a potential opportunity for investors seeking exposure to the cybersecurity sector, but it's important to consider possible risks. The competitive landscape is intensifying, with new entrants and established players vying for market share. Regulatory changes could impact the company's operations and growth trajectory. Finally, the overall market sentiment and economic conditions can influence investor appetite for growth stocks like CrowdStrike.

Zscaler, Inc.: A Leader in Cloud Security and Zero Trust

Zscaler Today

Zscaler, Inc. stock logo
ZSZS 90-day performance
Zscaler
$201.90
+5.98 (+3.05%)
(As of 07/12/2024 ET)
52-Week Range
$131.59
$259.61
Price Target
$225.21

Zscaler, Inc. NASDAQ: ZS is a leader in cloud security and Zero Trust solutions. It offers a comprehensive platform for securing access to applications and data across multiple environments. The company's Zero Trust Exchange platform provides a secure gateway for users, devices, and applications, ensuring secure access regardless of location or device type.

Zscaler's financial performance demonstrates its strong growth trajectory. Zscaler’s earnings report for the third quarter of fiscal year 2024 declared a 32% year-over-year increase in revenue, reaching $553.2 million. This growth is driven by increased adoption of its Zero Trust solutions, as businesses seek to enhance security in a world of distributed work and cloud-based applications.

The company reported GAAP net income of $19.1 million, a significant turnaround from the previous year’s $46 million loss. This profitability is supported by a high subscription gross margin, which demonstrates the efficiency and scalability of its cloud-based platform.

Zscaler, Inc. (ZS) Price Chart for Sunday, July, 14, 2024

Several factors drive Zscaler's growth, including strong demand for Zero Trust solutions, continuous product innovation, and strategic partnerships. The company continues to expand its platform, adding new features and capabilities to enhance security and performance. Zscaler's strategic partnerships with major technology players allow the company to reach a broader customer base and integrate its solutions seamlessly into existing IT infrastructure.

Evaluating Investor Confidence: CrowdStrike vs. Zscaler

When comparing CrowdStrike and Zscaler, investors should consider several key factors. Both companies exhibit strong revenue growth, demonstrating their ability to attract and retain customers in a rapidly evolving market. However, CrowdStrike's focus on endpoint security positions it as a leader in a more mature market, while Zscaler's focus on cloud security and Zero Trust solutions positions it as a leader in a more dynamic and rapidly growing market.

Both companies are profitable and cash-generative, with high subscription gross margins highlighting the efficiency of their cloud-based models. However, CrowdStrike's high valuation currently reflects investor confidence in its leadership position in endpoint security. Zscaler, while experiencing rapid growth, has a lower valuation, potentially indicating a higher risk-reward profile.

Investors seeking to mitigate risk should consider diversifying their cybersecurity investments across sub-sectors. While both companies are strong contenders, their focus on distinct areas of cybersecurity provides a foundation for a diversified portfolio.

The future of the cybersecurity sector is bright, with long-term growth fueled by the increasing digitalization of businesses and the constant evolution of threats. Regulatory changes and technological advancements will continue to shape the industry, potentially creating new opportunities and challenges for both companies. Investors should monitor these developments closely as they assess the long-term investment potential of CrowdStrike and Zscaler.

Should you invest $1,000 in CrowdStrike right now?

Before you consider CrowdStrike, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and CrowdStrike wasn't on the list.

While CrowdStrike currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

7 Stocks to Buy And Hold Forever Cover

Click the link below and we'll send you MarketBeat's list of seven stocks and why their long-term outlooks are very promising.

Get This Free Report
Jeffrey Neal Johnson
About The Author

Jeffrey Neal Johnson

Contributing Author

Retail and Technology Stocks

Like this article? Share it with a colleague.

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
CrowdStrike (CRWD)
3.8425 of 5 stars
3.84 / 5 stars
$371.32+0.2%N/A700.62Moderate Buy$382.35
Zscaler (ZS)
4.0704 of 5 stars
4.07 / 5 stars
$201.90+3.1%N/A-395.88Moderate Buy$225.21
Compare These Stocks  Add These Stocks to My Watchlist 


Featured Articles and Offers

The Best Single Stock to Own for 5 Years

The Best Single Stock to Own for 5 Years

In this video, we dive into the long-term investment game by discussing the potential of sticking with just one stock over the next five years.

Related Videos

Cathie Wood’s AMD Buy: Smart Move or Risky Business
AMD is Down 35%. Now is the Time to Buy the Dip
Skip Nvidia: Finding AI Stocks Beyond the Buzz

Stock Lists

All Stock Lists

Investing Tools

Calendars and Tools

Search Headlines