CrowdStrike Bets on Identity Security: Is it the Next Growth Engine?

CrowdStrike CRWD is putting more focus on identity security, which it sees as a big growth opportunity. In the second quarter of fiscal 2026, its identity products, including Falcon Shield and a new Privileged Access Management (PAM) solution, generated $435 million in annual recurring revenue (ARR). This represented year-over-year growth of approximately 21%.

With the launch of Falcon Next-Gen Identity Security in August 2025,  CrowdStrike has strengthened its identity security portfolio. This product protects all types of identities, including people, service accounts, and even AI agents across on-premises, cloud, and software-as-a-service platforms. Falcon Next-Gen Identity Security unifies initial access prevention, PAM, identity threat detection and response (ITDR), and SaaS identity protection into a single platform. Delivered through the Falcon platform, it aims to avoid the delays and complexity of using different tools

The need for identity security is increasing at a rapid pace. Attackers now often use stolen credentials, service accounts, or AI agents to break in and move through networks. By offering one platform to cover all of these, CrowdStrike wants to close those gaps. Customers are already making the switch. In the second quarter of fiscal 2026, a large consulting firm replaced its old PAM provider with CrowdStrike after being frustrated with years of high costs and poor results. 

With steady ARR growth and early customer wins, identity security can become one of CrowdStrike’s strongest growth engines as it marches toward its $10 billion ARR goal. The Zacks Consensus Estimate for CrowdStrike’s fiscal 2026 revenues is pegged at $4.78 billion, suggesting a year-over-year increase of 20.9%.

How Competitors Fare Against CRWD

CyberArk CYBR and Okta Inc. OKTA are key players competing with CrowdStrike in identity security.

CyberArk is an established leader in identity security and privileged access management. CyberArk is rapidly enhancing the capabilities of its identity security platform with AI integration. CyberArk Secure AI Agents Solution and CORA AI are the two most important recent additions to its portfolio, enabling it to secure a full spectrum of identities, including human, AI and machine.

Okta is best known for its identity and access management solutions. Okta has been adding AI-driven tools that automate risk detection and reduce manual processes in managing user access. Enterprises can implement Identity Threat Protection with Okta AI to leverage AI and machine learning techniques for real-time detection of the entire spectrum of Identity attacks.

CRWD’s Price Performance, Valuation and Estimates

Shares of CrowdStrike have gained 29.9% year to date compared with the Security industry’s growth of 12.6%.

CRWD YTD Price Return Performance

From a valuation standpoint, CrowdStrike trades at a forward price-to-sales ratio of 20.65X, way higher than the industry’s average of 12.44X.

CRWD Forward 12-Month P/S Ratio

The Zacks Consensus Estimate for CrowdStrike’s fiscal 2026 earnings implies a year-over-year decline of 6.6%, while for fiscal 2027 earnings indicates year-over-year growth of 29%. The estimates for fiscal 2026 and 2027 have both been revised upward over the past 30 days.

 
CrowdStrike currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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