Two prominent cybersecurity stocks, CrowdStrike Holdings and Fortinet, have been making waves in the market. Despite their differences, both companies offer unique value propositions that set them apart from each other.
CrowdStrike’s cutting-edge cloud-based endpoint security, delivered through its Falcon platform, has captured the attention of investors. The company’s subscription-based software-as-a-service (SaaS) model provides various cloud modules, making it an attractive option for those seeking advanced cybersecurity solutions. With a forward P/E ratio of 78.1x, CrowdStrike’s earnings are expected to soar, making it a compelling buy-the-dip opportunity.
On the other hand, Fortinet offers a diverse portfolio of 50 enterprise-grade products, focusing on securing people, devices, and data everywhere. While its on-premises hardware solutions may appear limiting, they also provide a stickier customer base due to the difficulty of swapping out old hardware. Fortinet’s pivot to non-firewall solutions and security operations (SecOps) is a positive sign, but its growth rate lags behind CrowdStrike’s.
The recent global outage, attributed to an update from CrowdStrike, has led to a 27% decline in its stock over the last three months. However, this dip may present a buying opportunity, especially considering the company’s extreme growth and favorable cloud-based business model. CrowdStrike’s CEO, George Kurtz, has faced scrutiny due to his involvement in a similar outage at McAfee, but his experience in managing crises could be an advantage.
Fortinet’s stock, on the other hand, has surged 29% over the last three months, making it a less attractive buy at present. While both companies have enjoyed significant long-term share price appreciation, CrowdStrike’s growth rate and cloud-based model make it the more appealing option for those seeking a near-term opportunity.
In conclusion, CrowdStrike’s long-term bullish view and Fortinet’s neutral view make them distinct choices for investors. While both companies have their strengths and weaknesses, CrowdStrike’s growth potential and cloud-based offerings position it as a more attractive option for those willing to buy the dip.
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