Which Cyber Security Stocks Could Challenge CrowdStrike?

Has CrowdStrike’s infamous July outage created an opportunity for the likes of SentinelOne and Fortinet?

CrowdStrike [CRWD] is a cyber security company specializing in endpoint protection, threat intelligence and incident response.

Its Falcon platform uses cloud-based artificial intelligence and machine learning to detect, prevent and respond to cyber threats in real-time.

While it is one of the most recognizable names in this market, CrowdStrike faces competition from the likes of SentinelOne [S] and Fortinet [FTNT], and a major incident in July — which saw global IT systems crash, grounding planes and halting hospital operations — may have created a window of opportunity for them.

CRWD Stock Crashes

Ever since an update to Falcon caused a major global IT outage in July, CrowdStrike’s reputation has been somewhat diminished.
 
CrowdStrike had previously been one of the best-regarded cyber security companies in the business, but the outage — which cost Fortune 500 companies an estimated $5.4bn — has severely dented investor confidence and seen its CEO George Kurtz summoned to Congress to testify about the issue.
 
CrowdStrike’s share price plummeted 11.10% on July 19, the day of the crash, and a further 16.00% over the course of the following week.
 
Despite further falls during August, a subsequent rally has seen CrowdStrike’s stock recover to slightly above its July 22 close. The stock was up 4.42% in 2024 through September 3 and 65.35% over the preceding 12 months.

CRWD Stock: Alternatives

Conversely, SentinelOne’s stock is down 16.62% year-to-date, despite having risen since the outage. It posted gains of 32.95% over the past 12 months, but these are roughly half of CrowdStrike’s gains during the period.
 
SentinelOne’s stock did register a sharp uptick on July 19 and in the days following. Since then, however, its price movements have mirrored CrowdStrike’s. Moreover, it had previously suffered several sharp declines — corresponding in particular to the release of its Q4 2024 and Q1 2025 results, on March 14 and May 30, respectively.
 
Then there is Fortinet, which trails both over the past 12 months with relatively modest gains of 26.71%. However, in the year to date it is the top performing of the three stocks, with gains of 31.78%.

CRWD vs S vs FTNT: The Fundamentals

An analysis of the three companies’ fundamentals shows that there are three distinct profiles for investors to consider.

Source: Yahoo Finance
 
Both CrowdStrike and Fortinet have a large capitalization compared to SentinelOne.
 
Both SentinelOne and Fortinet are both favorably priced, relative to sales, compared to CrowdStrike.
 
Both CrowdStrike and SentinelOne are expected to grow sales roughly twice as fast as Fortinet in the next financial year.

Unpicking all this might suggest that SentinelOne has the most favorable valuation for a growth-focused investor, but there is a catch: it has the lowest expected EPS of the three companies for the next financial year, at just $0.20. With CrowdStrike and Fortinet expected to post EPS of $4.29 and $2.25, respectively, investors should consider how long they might be willing to wait for SentinelOne’s earnings to catch up with those of its larger competitors — bearing in mind that, in a competitive landscape, this could be difficult for it to achieve over any timescale.

The above is based on analyst expectations which, of course, are never guaranteed to transpire. On the basis of fundamentals alone a case can be made for any of the three stocks.

CRWD Stock: The Investment Case

The Bull Case for CrowdStrike

CrowdStrike posted a positive earnings report for Q2 2025, increasing annual recurring revenue 42% year-over-year to $3.86bn and increasing non-GAAP net income by 45% year-over-year. Quarterly EPS of $1.04 beat analyst expectations by 7.22%.
 
“I’m reassured by customers’ and prospects’ feedback,” said Kurtz in a call with analysts following the results, many of whom want “to do more with CrowdStrike post-incident as evidenced by multiple seven- and eight-figure platform expansions with most opting for multi-year deals.”

The Bear Case for CrowdStrike

However, CrowdStrike has revised its own revenue estimates downwards in light of delayed subscriptions following the outage. While Kurtz played down the significance of this, there is no guarantee that more customers besides those whose subscriptions were up for renewal in the summer will not follow suit, and CrowdStrike’s revenue projections — and, consequently, its earnings expectations — could fall further if this happens.
 
Conversely, both SentinelOne and Fortinet raised their guidance following their most recent earnings reports. Should CrowdStrike lose customers in the fallout from the outage, then its competitors could stand to benefit from this lost business.

Conclusion

The pullback in CrowdStrike’s share price following the July outage could provide investors with a buying opportunity for one of the cyber security market’s dominant players. However, there is risk involved in the stock, particularly over the next year, as it remains to be seen whether or not it can retain customers in light of the incident.
 
This could create an opportunity for competitors like SentinelOne or Fortinet to capitalize and expand their own customer bases.

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