CrowdStrike - Wealth Engine

CrowdStrike vs Palo Alto Networks is the cleanest valuation question in software right now. On September 14, 2026, CRWD jumped 13.85% and PANW 13.09% while the S&P 500 fell 0.48%. At the September 15 close, CrowdStrike trades near 41.5x forward revenue against Palo Alto’s 21.7x — nearly double the multiple for slower ARR growth.

What happened on September 14 that repriced cybersecurity stocks?

Security names rallied hard into a falling tape. Weekend AI-safety warnings from Anthropic’s Dario Amodei and OpenAI’s Sam Altman pushed money out of semiconductors and into software that protects systems already deployed.

According to TheStreet’s September 14 market recap, the S&P 500 closed down 0.48% at 7,619.95 and the Nasdaq Composite fell 0.56% to 26,186.41. The VanEck Semiconductor ETF dropped 4%. The 10-year Treasury yield touched 4.999%, its highest since October 2023.

Cybersecurity went the other way. Per 24/7 Wall St., CrowdStrike closed up 13.85% at $235.38, Palo Alto Networks up 13.09% at $373.94, Zscaler up 16.52% at $191.73, Okta up 11.98% and Fortinet up 9.04%.

That is a sector-wide repricing on sentiment. Neither firm reported anything that day, which is exactly why the valuation math is now the whole story.

CrowdStrike vs Palo Alto Networks: what do the actual numbers say?

Palo Alto is roughly 2.4x CrowdStrike’s size by revenue and generates far more free cash flow. CrowdStrike grows organically faster and carries a much higher multiple. Both remain unprofitable on a GAAP basis, which matters more than most coverage admits.

Growth and recurring revenue

CrowdStrike’s Q2 FY2027 release filed with the SEC on August 26, 2026 shows revenue of $1.47 billion, up 26% year over year, and ending ARR of $5.84 billion, up 25%. Net new ARR of $332.8 million was a company record.

Palo Alto’s fiscal Q4 2026 release on September 1, 2026 reported quarterly revenue of $3.41 billion, up 34%, with next-generation security ARR of $9.10 billion, up 63%. Remaining performance obligations hit $21.2 billion, up 34%.

Cash generation and GAAP reality

Palo Alto’s FY2026 adjusted free cash flow was $4.414 billion on a 38.4% margin. CrowdStrike’s Q2 free cash flow was $377.4 million on a 26% margin.

Both still lose money under GAAP. CrowdStrike posted a GAAP loss from operations of $33.2 million against $371.6 million non-GAAP. Palo Alto reported a Q4 GAAP net loss of $282 million, or ($0.35) per diluted share, versus $1.02 non-GAAP. The gap is stock-based compensation and acquisition costs in both cases.

Metric	CrowdStrike (CRWD)	Palo Alto Networks (PANW)
Share price (Sept 15, 2026 close)	$242.49	$375.09
Market cap	$248.83B	$306.82B
Latest quarterly revenue	$1.47B (+26%)	$3.41B (+34%)
Recurring revenue base	ARR $5.84B (+25%)	NGS ARR $9.10B (+63%)
Non-GAAP operating margin	25%	29.6%
GAAP operating result	-$33.2M loss	-$282M net loss (Q4)
Free cash flow margin	26% (Q2)	38.4% (FY26 adjusted)
FY guidance revenue (midpoint)	$6.001B	$14.15B
FY guidance non-GAAP EPS	$1.25–$1.26	$4.16–$4.19
Forward P/E (stockanalysis.com)	166.9x	89.5x
52-week range	$85.68–$243.98	$139.57–$398.88

Prices and market caps as of the September 15, 2026 close. Fundamentals from each company’s most recent earnings release.

Which stock is more expensive per dollar of revenue?

CrowdStrike, by a wide margin. On company-issued guidance, CRWD trades at roughly 41.5x forward revenue versus 21.7x for PANW. You pay nearly twice as much per revenue dollar for a company guiding to slower total growth.

The arithmetic, using the September 15 closing market caps:

CrowdStrike: $248.83B ÷ $6.001B FY2027 revenue guidance midpoint = 41.5x
Palo Alto: $306.82B ÷ $14.15B FY2027 revenue guidance midpoint = 21.7x
CrowdStrike on ARR: $248.83B ÷ $5.84B = 42.6x
CrowdStrike on earnings: $242.49 ÷ $1.255 guided EPS = 193x
Palo Alto on earnings: $375.09 ÷ $4.175 guided EPS = 89.8x

Free cash flow widens the gap. Palo Alto guides to a 38.0% adjusted FCF margin on $14.15 billion, implying about $5.38 billion — roughly 57x the market cap. Apply CrowdStrike’s 26% Q2 margin to its $6.001 billion guide and you get about $1.56 billion, or roughly 159x.

On every measurable input — revenue, earnings, cash flow — Palo Alto Networks is the cheaper stock today. That is not a recommendation. It is a ratio.

Is Palo Alto’s 63% ARR growth actually organic?

No, and this is the most important caveat in the comparison. That 63% NGS ARR figure is flattered by a $25 billion acquisition, and Palo Alto does not break out organic versus inorganic contribution anywhere in the earnings release.

Palo Alto announced the CyberArk deal on July 30, 2025 at roughly $25 billion in equity value — $45.00 in cash plus 2.2005 PANW shares per CyberArk share, a 26% premium to the unaffected 10-day VWAP. It closed in the second half of fiscal 2026.

Shareholders paid for it in dilution. The release shows FY2026 weighted-average diluted shares of 764 million against 817 million in Q4 alone — about 7% more shares in a single quarter.

Management’s own FY2027 guidance tells the story: NGS ARR of $11.075–$11.175 billion, or 22–23% growth. That is roughly a third of the Q4 headline rate. The company also said the deal is not accretive to free cash flow per share until fiscal 2028.

Strip out the acquisition and the growth gap narrows considerably. CrowdStrike’s 25% ARR growth is organic, and it raised full-year net new ARR growth guidance by 630 basis points to 34% at the midpoint.

Is a cybersecurity ETF cheaper than owning both stocks?

For pure CRWD and PANW exposure, no — the ETF is strictly more expensive. Cybersecurity funds charge 0.47% to 0.60% annually on your entire balance while delivering only 12% to 19% combined exposure to these two names. Direct ownership at a zero-commission broker costs nothing per year.

ETF	Expense ratio	AUM	Holdings	PANW weight	CRWD weight
IHAK (iShares)	0.47%	$1.14B	34	n/d	n/d
BUG (Global X)	0.50%	$1.76B	31	7.62%	7.72%
CIBR (First Trust)	0.58%	$16.18B	42	9.48%	9.20%
HACK (Amplify)	0.60%	$3.05B	23	6.40%	6.06%

Expense ratios and AUM from each issuer’s fund page; AUM and holdings as of September 14–15, 2026. CIBR expense ratio as of February 2, 2026.

The $10,000 worked example

Put $10,000 into CIBR, the largest fund at $16.18 billion in assets. First Trust’s fund page lists Palo Alto at 9.48% and CrowdStrike at 9.20% — 18.68% combined, or $1,868 of your $10,000.

You pay 0.58% on the full $10,000, not on the $1,868. That is $58 per year, or effectively 3.1% annually against the exposure you actually wanted ($58 ÷ $1,868).

Buy $1,868 of the two stocks directly, split to match, and the recurring cost is $0 at any major zero-commission US broker. Over ten years on a flat balance, the fee difference alone is $580 versus nothing.

Fund against fund: $10,000 costs $47 a year in IHAK, $50 in BUG, $58 in CIBR and $60 in HACK. The IHAK-to-HACK gap is $130 over a decade on a flat balance — small next to the 0.16% median bid/ask spread iShares reports for IHAK, about $16 on a $10,000 round trip.

The honest counterpoint: you are not buying a fund for the two largest holdings. You are buying it for the other 80% — Fortinet, Zscaler, Okta, Cloudflare, Rubrik — and for not having to pick. That diversification is what the 0.47% to 0.60% actually purchases. See our breakdown of how sector ETF construction changes your outcome in XLE vs XOP for the same trade-off in energy.

Which approach fits which investor?

It depends on one measurable thing: whether you want concentrated exposure to a specific business model or diversified exposure to a spending theme. Cost follows directly from that choice, and the table below prices each route.

If you want…	Route	Annual cost on $10,000	Main risk
The cheapest valuation in the pair	PANW directly	$0	Acquisition integration; 7% Q4 dilution
Fastest organic ARR growth	CRWD directly	$0	41.5x forward revenue leaves no cushion
Both names, no stock picking	CIBR or BUG	$58 / $50	Only ~15–19% in the two names
Lowest fund fee	IHAK	$47	Smallest AUM at $1.14B; 0.16% spread
Most concentrated fund	HACK (23 holdings)	$60	Highest fee, lowest PANW/CRWD weights

Costs calculated from published expense ratios as of September 15, 2026. Zero annual cost assumes a commission-free US broker.

For context on how index-level fee differences compound, see our comparison of SPY vs VOO vs IVV, where three basis points changes the math on a much larger base.

Frequently asked questions

Which is bigger, CrowdStrike or Palo Alto Networks?

Palo Alto, on both revenue and market cap. It reported $11.48 billion in FY2026 revenue against CrowdStrike’s $6.001 billion FY2027 guidance midpoint, and closed September 15, 2026 at a $306.82 billion market cap versus $248.83 billion.

Why did cybersecurity stocks rise on September 14, 2026?

Weekend AI-safety warnings from the Anthropic and OpenAI CEOs triggered a rotation out of AI infrastructure and into security software. Semiconductors fell 4% the same day the S&P 500 lost 0.48%, while CRWD gained 13.85% and PANW 13.09%.

Are CrowdStrike and Palo Alto profitable?

Not on a GAAP basis in their most recent quarters. CrowdStrike reported a $33.2 million GAAP loss from operations; Palo Alto reported a $282 million GAAP net loss in fiscal Q4 2026. Both are solidly profitable on non-GAAP measures and both generate positive free cash flow.

What is NGS ARR and why does Palo Alto report it?

Next-generation security ARR covers Palo Alto’s cloud and AI-era subscription products, excluding legacy firewall hardware. It is not comparable to CrowdStrike’s total ARR, which covers the entire business. Comparing the two directly overstates Palo Alto’s growth.

What is the cheapest cybersecurity ETF?

IHAK from iShares at 0.47%, per the issuer’s fund page. BUG charges 0.50%, CIBR 0.58% and HACK 0.60%. IHAK is also the smallest at $1.14 billion in net assets as of September 15, 2026, and lists a 0.16% 30-day median bid/ask spread.

Does buying an ETF give me meaningful CRWD and PANW exposure?

Partially. CIBR carries the highest combined weight at 18.68%. BUG is at 15.34% and HACK at 12.46%. In every case, the majority of your money goes to other holdings.

How much did the CyberArk deal dilute Palo Alto shareholders?

The FY2026 release shows weighted-average diluted shares of 764 million for the year against 817 million in Q4 — about 7% more shares. The $25 billion deal was structured as $45.00 cash plus 2.2005 PANW shares per CyberArk share.

The bottom line

On the measurable question — what you pay per dollar of revenue, earnings and free cash flow — Palo Alto Networks is materially cheaper. It trades at 21.7x forward revenue and roughly 57x implied free cash flow versus CrowdStrike’s 41.5x and roughly 159x.

CrowdStrike earns some of that premium. Its growth is organic, its net new ARR set a record at $332.8 million, and it raised full-year ARR growth guidance by 630 basis points. Palo Alto’s headline growth is not comparable — it bought a $25 billion company and diluted holders by roughly 7% in one quarter to do it.

What it depends on is specific: if you believe organic net new ARR of $333 million a quarter compounds, CrowdStrike’s multiple is defensible. If you want the same theme at half the revenue multiple and 38% free cash flow margins, Palo Alto is the cheaper entry — with acquisition integration as the identified risk.

One more thing the September 14 move should make investors uneasy. Both stocks repriced double digits on two CEOs’ weekend remarks, with no filing, no guidance change and no data. CRWD closed September 15 at $242.49, within $1.49 of its 52-week high. A sentiment-driven rally into the top of a range is the worst moment to skip the arithmetic. The same lesson applies to earnings-driven moves — see our look at Oracle vs Adobe, where both beat and only one printed cash.

This article is journalism, not investment advice. Do your own research before investing.

Tag: CrowdStrike

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