In the ever-evolving landscape of cybersecurity, two prominent players stand out: CrowdStrike Holdings, Inc. (CRWD) and Zscaler, Inc. (ZS). Both companies operate within the Software – Infrastructure industry, focusing on innovative cloud-based security solutions. Their overlapping market strategies and distinct approaches to threat prevention make them worthy of comparison. As we delve into their strengths and weaknesses, I aim to help you determine which company may be the more compelling investment opportunity.
Table of contents
Company Overview
CrowdStrike Holdings, Inc. Overview
CrowdStrike Holdings, Inc. is a leading provider of cloud-delivered cybersecurity solutions. Founded in 2011 and headquartered in Austin, Texas, the company specializes in endpoint protection, cloud workload security, and identity protection. Its flagship Falcon platform integrates advanced threat intelligence and managed security services, enabling organizations to secure their digital environments against evolving threats. With a market capitalization of approximately $121.6B, CrowdStrike has established itself as a key player in the cybersecurity industry, emphasizing a subscription-based model that reflects its innovative approach to security.
Zscaler, Inc. Overview
Zscaler, Inc., founded in 2007 and based in San Jose, California, offers cloud security solutions that cater to secure user access to applications and services. The company’s Zscaler Internet Access and Zscaler Private Access solutions provide secure access to both external and internal applications, respectively. With a market cap of around $42.5B, Zscaler positions itself as a pioneer in zero trust security, focusing on comprehensive security for businesses adopting cloud technologies and SaaS applications.
Key similarities between CrowdStrike and Zscaler include their focus on cloud-based security solutions and subscription-based revenue models. However, they differ in their core offerings; CrowdStrike emphasizes endpoint and identity protection, while Zscaler specializes in secure access to applications and digital experience management.
Income Statement Comparison
The following table provides a comparison of key income statement metrics for CrowdStrike Holdings, Inc. (CRWD) and Zscaler, Inc. (ZS) for the most recent fiscal year.
| Metric | [Company A: CRWD] | [Company B: ZS] |
|---|---|---|
| Revenue | 3.95B | 2.67B |
| EBITDA | 294M | 112M |
| EBIT | 80M | -9M |
| Net Income | -19M | -41M |
| EPS | -0.08 | -0.27 |
Interpretation of Income Statement
In FY 2025, CrowdStrike reported a revenue of 3.95B, reflecting a significant increase from previous years, while Zscaler’s revenue of 2.67B also shows growth. However, both companies faced challenges with net income, as CRWD incurred a loss of 19M and ZS reported a loss of 41M. The EBITDA margin for CRWD remains notably better at 7.4% compared to ZS’s 4.2%, indicating better operational efficiency. Overall, while both companies are growing, profitability remains a concern, and the recent fiscal year showed continued pressure on margins and net income.
Financial Ratios Comparison
In this section, I provide a comparative overview of the most recent financial ratios for CrowdStrike Holdings, Inc. (CRWD) and Zscaler, Inc. (ZS). This will help you assess their financial health and investment potential.
| Metric | [Company A: CRWD] | [Company B: ZS] |
|---|---|---|
| ROE | -0.59% | -2.31% |
| ROIC | 0.70% | -7.21% |
| P/E | -5055.66 | -1063.01 |
| P/B | 29.71 | 24.51 |
| Current Ratio | 1.67 | 1.94 |
| Quick Ratio | 1.67 | 1.94 |
| D/E | 0.24 | 0.99 |
| Debt-to-Assets | 0.09 | 0.28 |
| Interest Coverage | -4.58 | -13.49 |
| Asset Turnover | 0.45 | 0.42 |
| Fixed Asset Turnover | 4.76 | 4.22 |
| Payout ratio | 0.00 | 0.00 |
| Dividend yield | 0.00% | 0.00% |
Interpretation of Financial Ratios
The ratios indicate that both companies are facing significant challenges. CRWD shows a negative ROE and P/E ratio, suggesting ongoing losses. ZS also demonstrates negative profitability metrics, with a concerning high debt-to-equity ratio. The current and quick ratios indicate liquidity, where both companies maintain a healthy buffer. However, the interest coverage ratios are alarming, indicating difficulty in meeting interest obligations. Caution is advised when considering investments in either company.
Dividend and Shareholder Returns
Neither CrowdStrike (CRWD) nor Zscaler (ZS) pays dividends, reflecting their focus on reinvestment and growth. Both companies are in high-growth phases, prioritizing research and development over shareholder payouts. Despite not distributing dividends, they engage in share buyback programs, which can enhance shareholder value by reducing share count. Ultimately, this strategic approach appears to support sustainable long-term value creation, as it allows them to invest in future growth while managing capital efficiently.
Strategic Positioning
In the competitive landscape of cloud security, CrowdStrike (CRWD) holds a significant market share with its Falcon platform, focusing on endpoint protection and managed security services. Zscaler (ZS), with its innovative Zscaler Internet Access and Private Access solutions, is also a key player, providing secure access to cloud applications. Both companies face competitive pressure from emerging technologies and established incumbents, necessitating constant innovation to adapt to rapid technological disruptions in the sector.
Stock Comparison
In analyzing the weekly stock price movements of CrowdStrike Holdings, Inc. (CRWD) and Zscaler, Inc. (ZS) over the past year, we observe significant trends and dynamics that merit investor attention.
Trend Analysis
For CrowdStrike Holdings, Inc. (CRWD), the overall price change over the past year is +92.18%. This indicates a bullish trend, with the stock experiencing acceleration in its upward movement. The highest price recorded during this period was 543.01, while the lowest was 217.89. Recent analysis from September 7, 2025, to November 23, 2025, shows a price increase of +17.49%, further supporting the bullish sentiment, despite a standard deviation of 37.66 indicating some volatility.
In contrast, Zscaler, Inc. (ZS) has also demonstrated a positive trajectory with a price change of +24.12% over the past year, categorizing it as bullish as well. The highest price reached was 331.14, with a low of 156.78. However, in the recent period from September 7, 2025, to November 23, 2025, the price change is minimal at +0.3%, suggesting a neutral trend. The standard deviation of 17.44 indicates lower volatility compared to CRWD.
In summary, both stocks show strong yearly performance, with CRWD exhibiting significant bullish acceleration and ZS maintaining a more stable, albeit neutral, trend in the recent analysis.
Analyst Opinions
Recent analyst recommendations for CrowdStrike (CRWD) and Zscaler (ZS) have been cautious, with both companies receiving a rating of C-. Analysts like those from Morgan Stanley highlight concerns about growth potential and profitability, suggesting a hold position. The overall consensus leans towards a cautious stance, indicating neither a strong buy nor sell recommendation for the current year. This reflects a broader market sentiment of uncertainty regarding tech stock valuations in the current economic climate. It’s essential for investors to consider these factors before making decisions.
Stock Grades
In this section, I present the latest stock ratings for CrowdStrike Holdings, Inc. (CRWD) and Zscaler, Inc. (ZS) from reputable grading companies.
CrowdStrike Holdings, Inc. Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Truist Securities | Maintain | Buy | 2025-11-18 |
| Rosenblatt | Maintain | Buy | 2025-11-18 |
| Stifel | Maintain | Buy | 2025-11-17 |
| Mizuho | Maintain | Neutral | 2025-11-17 |
| Barclays | Maintain | Overweight | 2025-11-14 |
| Baird | Maintain | Neutral | 2025-11-14 |
| Morgan Stanley | Maintain | Equal Weight | 2025-11-13 |
| BTIG | Maintain | Buy | 2025-11-04 |
| Oppenheimer | Maintain | Outperform | 2025-10-17 |
| WestPark Capital | Maintain | Hold | 2025-10-15 |
Zscaler, Inc. Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Rosenblatt | Maintain | Buy | 2025-11-18 |
| Mizuho | Maintain | Neutral | 2025-11-17 |
| Morgan Stanley | Maintain | Overweight | 2025-11-13 |
| Barclays | Maintain | Overweight | 2025-11-12 |
| Wedbush | Maintain | Outperform | 2025-11-10 |
| RBC Capital | Maintain | Outperform | 2025-10-02 |
| Canaccord Genuity | Maintain | Buy | 2025-09-04 |
| JMP Securities | Maintain | Market Outperform | 2025-09-03 |
| Evercore ISI Group | Maintain | Outperform | 2025-09-03 |
| Needham | Maintain | Buy | 2025-09-03 |
Overall, both CrowdStrike and Zscaler have maintained strong ratings, with several “Buy” and “Overweight” recommendations indicating positive investor sentiment. The consistent ratings suggest stability in their market positions.
Target Prices
Recent analysis reveals the target consensus for two prominent companies in the software infrastructure sector. Here are the target prices from verified analysts:
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| CrowdStrike Holdings, Inc. | 706 | 430 | 541.57 |
| Zscaler, Inc. | 350 | 300 | 326.13 |
For CrowdStrike, analysts anticipate a consensus target price of 541.57, which is approximately 10.4% above its current price of 490.67. Similarly, Zscaler’s consensus target of 326.13 suggests an upside of about 18.6% from its current price of 275.01. Overall, both companies show promising growth potential according to analyst expectations.
Strengths and Weaknesses
The following table outlines the strengths and weaknesses of CrowdStrike Holdings, Inc. (CRWD) and Zscaler, Inc. (ZS) based on the most recent data.
| Criterion | CrowdStrike (CRWD) | Zscaler (ZS) |
|---|---|---|
| Diversification | Moderate | Moderate |
| Profitability | Low (net margin: -0.49%) | Low (net margin: -1.55%) |
| Innovation | High | High |
| Global presence | Strong | Strong |
| Market Share | Growing | Growing |
| Debt level | Low (debt-to-equity: 0.24) | Moderate (debt-to-equity: 0.99) |
Key takeaways indicate that both companies exhibit strong innovation and global presence, but they struggle with profitability. CrowdStrike has a lower debt level compared to Zscaler, which may offer a slight edge in financial stability.
Risk Analysis
The following table outlines the key risks associated with CrowdStrike Holdings, Inc. (CRWD) and Zscaler, Inc. (ZS).
| Metric | CrowdStrike (CRWD) | Zscaler (ZS) |
|---|---|---|
| Market Risk | Moderate | Moderate |
| Regulatory Risk | High | High |
| Operational Risk | Moderate | High |
| Environmental Risk | Low | Low |
| Geopolitical Risk | Moderate | Moderate |
Both companies face significant regulatory risks due to the evolving nature of cybersecurity laws. Additionally, operational challenges are pronounced for Zscaler, given its heavy reliance on cloud infrastructure, which adds complexity to service delivery.
Which one to choose?
In comparing CrowdStrike Holdings, Inc. (CRWD) and Zscaler, Inc. (ZS), both companies have shown a bullish stock trend, with CRWD up 92.18% and ZS up 24.12% recently. However, CRWD exhibits higher gross profit margins (75% vs. 77%) but struggles with negative net income margins, while ZS has a slightly better profitability profile albeit with higher debt levels. Analyst ratings for both companies are C-, indicating a neutral outlook. The enterprise value to EBITDA ratio for CRWD is significantly higher (318.5) compared to ZS (386.9), suggesting that CRWD may be overvalued relative to its cash flow.
Investors focused on growth may prefer CRWD due to its aggressive price momentum and market positioning, while those prioritizing stability and lower debt levels might favor ZS.
Specific risks include competition in the cybersecurity industry and dependence on market conditions for both companies.
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:
