In the rapidly evolving landscape of cybersecurity, two companies stand out for their innovative approaches: CrowdStrike Holdings, Inc. (CRWD) and Zscaler, Inc. (ZS). Both operate within the Software – Infrastructure industry, focusing on cloud security solutions that protect organizations from cyber threats. Their overlapping markets and unique strategies for addressing cybersecurity challenges make them compelling subjects for comparison. In this article, I’ll analyze their strengths and weaknesses to help you determine which company might be the more interesting investment opportunity.
Table of contents
Company Overview
CrowdStrike Holdings, Inc. Overview
CrowdStrike Holdings, Inc. is a leader in cloud-delivered cybersecurity solutions, specializing in endpoint protection and cloud workload security. Founded in 2011 and headquartered in Austin, Texas, the company offers a diverse array of services, including threat intelligence, managed security services, and identity protection through its Falcon platform. With a market capitalization of approximately $129B, CrowdStrike is well-positioned in the technology sector, serving a global clientele across various industries. The company’s innovative approach to cybersecurity, emphasizing proactive threat hunting and Zero Trust principles, has set it apart in a rapidly evolving market.
Zscaler, Inc. Overview
Zscaler, Inc. operates as a cloud security company, focusing on securing access to external applications and services. Established in 2007 and based in San Jose, California, Zscaler provides solutions like Zscaler Internet Access and Zscaler Private Access, which cater to both SaaS applications and internal cloud-hosted applications. With a market cap of around $38B, the company’s offerings also include Zscaler Digital Experience, which enhances user experience metrics. Zscaler’s emphasis on secure, scalable cloud solutions positions it as a robust competitor in the cybersecurity landscape.
Key similarities and differences
Both CrowdStrike and Zscaler operate within the cybersecurity sector, focusing on cloud-based solutions for endpoint and data security. However, CrowdStrike primarily targets endpoint protection, while Zscaler emphasizes secure access to external applications. Their distinct approaches reflect their specific market niches, highlighting the diverse strategies available to investors in this dynamic industry.
Income Statement Comparison
Below is a comparison of the income statements for CrowdStrike Holdings, Inc. (CRWD) and Zscaler, Inc. (ZS) for the most recent fiscal year, providing a snapshot of their financial performance.
| Metric | CrowdStrike (CRWD) | Zscaler (ZS) |
|---|---|---|
| Market Cap | 129B | 38B |
| Revenue | 3.95B | 2.67B |
| EBITDA | 295M | 112M |
| EBIT | 81M | -9M |
| Net Income | -19M | -41M |
| EPS | -0.08 | -0.27 |
| Fiscal Year | 2025 | 2025 |
Interpretation of Income Statement
In fiscal year 2025, CrowdStrike reported a revenue increase to 3.95B, reflecting a strong growth trend compared to previous years. However, it still incurred a net loss of 19M, indicating challenges in profitability despite robust top-line growth. Zscaler also experienced revenue growth to 2.67B, yet faced a larger net loss of 41M. Both companies showed stabilization in their EBITDA margins, but Zscaler’s operating income remained negative, suggesting ongoing pressures in managing operating expenses. The overall trend indicates that while revenues are growing, both companies need to address their cost structures to move toward profitability.
Financial Ratios Comparison
In this section, I present a comparative analysis of the most recent financial ratios for CrowdStrike Holdings, Inc. (CRWD) and Zscaler, Inc. (ZS). This will help us understand their financial health and operational efficiency.
| Metric | CRWD | ZS |
|---|---|---|
| ROE | -0.59% | -2.31% |
| ROIC | 0.70% | -0.71% |
| P/E | -5055.66 | -1063.01 |
| P/B | 29.71 | 24.51 |
| Current Ratio | 1.67 | 2.01 |
| Quick Ratio | 1.67 | 2.01 |
| D/E | 0.24 | 0.99 |
| Debt-to-Assets | 9.07% | 27.98% |
| Interest Coverage | -4.58 | -13.49 |
| Asset Turnover | 0.45 | 0.42 |
| Fixed Asset Turnover | 4.76 | 4.22 |
| Payout Ratio | 0% | 0% |
| Dividend Yield | 0% | 0% |
Interpretation of Financial Ratios
Both companies show significant challenges, particularly with negative P/E ratios, indicating ongoing losses. CRWD has a better current and quick ratio, suggesting stronger liquidity than ZS. However, both companies have high debt-to-equity ratios, indicating increased financial risk. The negative interest coverage ratios for both firms are concerning, highlighting their inability to cover interest expenses. Investors should carefully weigh these factors before making investment decisions.
Dividend and Shareholder Returns
Both CrowdStrike Holdings, Inc. (CRWD) and Zscaler, Inc. (ZS) do not pay dividends, reflecting their focus on reinvestment strategies for growth. They are in phases where they prioritize R&D and acquisitions to enhance their market positions. Despite not returning cash to shareholders via dividends, both companies engage in share buybacks, which can support stock price appreciation. However, this lack of dividends raises questions about sustainable long-term value creation for shareholders.
Strategic Positioning
CrowdStrike (CRWD) holds a significant position in the cloud security market, boasting a market cap of $129B. Its Falcon platform is widely recognized for its innovative threat intelligence and Zero Trust solutions. Meanwhile, Zscaler (ZS), with a market cap of $38B, focuses on secure access for users and devices through its Zscaler Internet Access and Private Access solutions. Both companies face competitive pressure from emerging technologies and must continuously adapt to market dynamics to maintain their leadership positions.
Stock Comparison
In this section, I will analyze the stock price movements and trading dynamics for CrowdStrike Holdings, Inc. (CRWD) and Zscaler, Inc. (ZS) over the past year. The focus will be on key price changes, trends, and overall market sentiment reflected in their price charts.
Trend Analysis
For CrowdStrike Holdings, Inc. (CRWD), the overall price change over the past year is +82.96%, indicating a bullish trend. The stock has experienced notable acceleration with a standard deviation of 79.79, suggesting significant volatility. The highest price recorded was 543.01, while the lowest was 217.89, showing a robust upward movement.
In the recent trend, CRWD saw a price change of +3.16% from September 21, 2025, to December 7, 2025. The standard deviation during this period was 21.74, reflecting moderate volatility. The trend slope is positive at 2.9, further supporting the bullish outlook.
Turning to Zscaler, Inc. (ZS), the overall price change over the past year is +5.28%, which also indicates a bullish trend, albeit with signs of deceleration. The standard deviation of 47.33 points to lower volatility compared to CRWD. The highest price reached 331.14, while the lowest was 156.78.
However, in the recent trend from September 21, 2025, to December 7, 2025, ZS reported a price change of -17.44%. This negative variation places the stock in a bearish position for this period, with a trend slope of -4.02 and a standard deviation of 25.96, indicating increased volatility during the downturn.
In summary, while CRWD maintains a strong bullish trajectory overall, ZS is currently facing challenges in its recent performance. Investors should consider these factors when making portfolio decisions.
Analyst Opinions
Recent recommendations for CrowdStrike Holdings, Inc. (CRWD) indicate a cautious stance, with a rating of C from analysts, reflecting concerns over its return on equity and assets. In contrast, Zscaler, Inc. (ZS) has received a slightly lower rating of C-, signaling similar apprehensions. Analysts suggest that while both companies have strong discounted cash flow scores, their overall performance metrics raise red flags. The consensus for both companies leans towards a hold, suggesting investors should closely monitor their developments before making any decisive moves.
Stock Grades
The latest stock ratings reveal a consistent sentiment among analysts for both CrowdStrike Holdings, Inc. (CRWD) and Zscaler, Inc. (ZS).
CrowdStrike Holdings, Inc. Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Goldman Sachs | maintain | Buy | 2025-12-04 |
| Citigroup | maintain | Buy | 2025-12-04 |
| Needham | maintain | Buy | 2025-12-03 |
| DA Davidson | maintain | Buy | 2025-12-03 |
| BTIG | maintain | Buy | 2025-12-03 |
| Cantor Fitzgerald | maintain | Overweight | 2025-12-03 |
| Citizens | maintain | Market Outperform | 2025-12-03 |
| Scotiabank | maintain | Sector Outperform | 2025-12-03 |
| JP Morgan | maintain | Overweight | 2025-12-03 |
| Rosenblatt | maintain | Buy | 2025-12-03 |
Zscaler, Inc. Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Citigroup | maintain | Buy | 2025-12-01 |
| Bernstein | downgrade | Market Perform | 2025-12-01 |
| Needham | maintain | Buy | 2025-11-26 |
| UBS | maintain | Buy | 2025-11-26 |
| Scotiabank | maintain | Sector Outperform | 2025-11-26 |
| Mizuho | maintain | Neutral | 2025-11-26 |
| Rosenblatt | maintain | Buy | 2025-11-26 |
| JP Morgan | maintain | Overweight | 2025-11-26 |
| BTIG | maintain | Buy | 2025-11-26 |
| Baird | maintain | Outperform | 2025-11-26 |
In summary, both companies maintain solid grades from various reputable analysts, although Zscaler has experienced a slight downgrade from Bernstein. Overall, the trend indicates sustained confidence in CRWD, while ZS shows mixed signals that could warrant closer observation.
Target Prices
The target consensus from analysts indicates an optimistic outlook for both CrowdStrike Holdings, Inc. and Zscaler, Inc.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| CrowdStrike Holdings, Inc. | 706 | 353 | 545.79 |
| Zscaler, Inc. | 360 | 264 | 320.64 |
For CrowdStrike, the consensus target price of $545.79 suggests a potential upside from its current price of $517.67. Similarly, Zscaler’s consensus of $320.64 indicates a favorable outlook compared to its current price of $243.23. Both companies are perceived positively by analysts, with significant growth potential ahead.
Strengths and Weaknesses
Below is a comparative analysis of the strengths and weaknesses of CrowdStrike Holdings, Inc. (CRWD) and Zscaler, Inc. (ZS):
| Criterion | CrowdStrike Holdings, Inc. (CRWD) | Zscaler, Inc. (ZS) |
|---|---|---|
| Diversification | Strong focus on cybersecurity | Specialized in cloud security |
| Profitability | Negative margins (-0.49%) | Negative margins (-1.55%) |
| Innovation | High investment in R&D | Strong product development |
| Global presence | Operates worldwide | Expanding international reach |
| Market Share | Growing but competitive landscape | Increasing market penetration |
| Debt level | Low debt-to-equity ratio (0.24) | Moderate debt-to-equity ratio (0.99) |
Key takeaways indicate that both companies exhibit strong innovation capabilities but are struggling with profitability. CrowdStrike has a lower debt level, which may suggest a more conservative financial strategy compared to Zscaler.
Risk Analysis
In the table below, I outline the key risks facing CrowdStrike Holdings, Inc. (CRWD) and Zscaler, Inc. (ZS) in 2025.
| Metric | CrowdStrike (CRWD) | Zscaler (ZS) |
|---|---|---|
| Market Risk | High | Moderate |
| Regulatory Risk | Moderate | High |
| Operational Risk | Moderate | High |
| Environmental Risk | Low | Low |
| Geopolitical Risk | Moderate | Moderate |
Both companies face significant market and operational risks as they navigate a competitive landscape. Regulatory scrutiny is intense, especially for Zscaler, which operates in a highly regulated environment. Recent data breaches in the sector amplify these risks, making robust risk management essential.
Which one to choose?
When comparing CrowdStrike Holdings, Inc. (CRWD) and Zscaler, Inc. (ZS), both companies exhibit robust growth potential but differ in their financial health and market performance. CRWD boasts a higher gross profit margin of 75% and has shown a remarkable price increase of 82.96% over the past year, indicating strong investor confidence. ZS, while also bullish, reported a modest price change of 5.28% and has experienced recent price declines.
CRWD holds a rating of C, indicating a more favorable outlook, whereas ZS is rated C-, reflecting potential challenges. Additionally, CRWD’s current ratio of 1.67 suggests better liquidity than ZS’s 2.01, which may be less concerning in a growth sector.
For growth-focused investors, CRWD appears to be the more attractive option due to its superior margins and upward price momentum. Conversely, those prioritizing stability might find ZS appealing given its lower price-to-sales ratio.
However, investors should be cautious of market competition and the potential impact of economic fluctuations.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Go further
I encourage you to read the complete analyses of CrowdStrike Holdings, Inc. and Zscaler, Inc. to enhance your investment decisions:
