CrowdStrike vs. Okta: Which Cybersecurity Stock is a Smart Buy?

CrowdStrike (CRWD) and Okta Inc. (OKTA) are both at the forefront of the cybersecurity space, playing key roles in guarding organizations from extensive cyberattacks. While CrowdStrike specializes in endpoint protection and extended detection and response (XDR), offering AI-native cloud security through its Falcon platform, Okta focuses on identity and access management, providing cloud-based solutions that help businesses safeguard user data. Both players are taking active roles in enabling enterprises against cloud and endpoint security.

CrowdStrike and Okta are riding the key industry trends, driven by the mounting incidents of credential theft, remote desktop protocol breaches and social engineering-based strikes by malicious actors. Per a Mordor Intelligence report, the cybersecurity space is expected to witness a CAGR of 12.45% from 2025 to 2030.

With this strong growth forecast for the cybersecurity market, the question remains: Which stock has more upside potential? Let’s break down their fundamentals, growth prospects, market challenges and valuation to determine which offers a more compelling investment case.

The Case for CrowdStrike Stock

CrowdStrike provides its cybersecurity services mainly through its Falcon platform. CrowdStrike’s Falcon platform is renowned for being the industry’s first multi-tenant, cloud native, intelligent security solution. The Falcon platform helps in securing workloads across on-premise, cloud-based and virtualized environments running on several endpoints, such as desktops, laptops, servers, virtual machines and IoT devices.

CrowdStrike’s cloud-based Falcon platform currently provides 29 cloud modules via a SaaS subscription model that is categorized under three categories — Endpoint Security, Security & IT Operations, and Threat Intelligence. The share of subscription-based sales to CrowdStrike’s total revenues grew from 72% in fiscal 2017 to 95% in fiscal 2025.

A key driver of CrowdStrike’s customer growth is its Falcon Flex subscription model, which streamlines security adoption with modular and scalable solutions. This flexibility fosters long-term customer commitments, fueling steady revenue growth and deeper platform integration. CrowdStrike’s subscription customers, who adopted six or more cloud modules, represented 48% of the total subscription customers at the end of the second quarter of fiscal 2026. Those with seven or more cloud modules accounted for 33% and those with eight or more cloud modules represented 23% as of July 31, 2025.

In the second quarter, CrowdStrike added a record $221 million in net new annual recurring revenue (ARR). This pushed up CrowdStrike’s total ARR to $4.66 billion, representing an increase of 20% from last year. A big part of this growth came from CrowdStrike’s Falcon Flex subscription model. The company now has over 1,000 Falcon Flex customers, and more than 100 have already signed follow-on re-Flex deals before their contracts ended. These re-Flex deals are important because they show that customers are expanding faster than expected, often boosting ARR by nearly 50%.

Many customers are also using Falcon Flex to replace several legacy tools and choosing to consolidate around CrowdStrike. One such example is a Fortune 500 software firm that signed an eight-figure re-Flex deal to modernize its security operations center, where the firm renewed its contract 18 months before the expiration of the initial Falcon Flex subscription.

These factors are likely to continue driving growth while supporting CrowdStrike’s top-line growth. In the second quarter, CrowdStrike’s sales and non-GAAP EPS grew 21% and 5.7%, respectively, year over year. The Zacks Consensus Estimate for fiscal 2026 and 2027 revenues is pegged at $4.78 billion and $5.80 billion, respectively, both indicating a year-over-year increase of aound 21%.

The Case for OKTA Stock

Okta’s latest financial results for the second quarter of fiscal 2026 highlight its strengthening position as a leader in identity security. Its broad portfolio, which includes Okta Identity Governance, Privileged Access, Device Access, Identity Security Posture Management, Identity Threat Protection with Okta AI, and Auth for GenAI, continues to drive customer wins and expand its addressable market.

In the second quarter, Okta’s revenues and EPS soared 12.7% and 26.4%, respectively, year over year. It exited the quarter with roughly 20,000 customers and $4.15 billion in remaining performance obligations, reflecting strong growth prospects for subscription revenues. Customers with more than $100K in Annual Contract Value increased 7% year over year to 4,945.

Okta is also benefiting from a rich partner base that includes the likes of Amazon Web Services, CrowdStrike, Google, LexisNexis Risk Solutions, Microsoft, Netskope, Palo Alto Networks, Plaid, Proofpoint, Salesforce, ServiceNow, VMware, Workday, Yubico and Zscaler.

Okta’s growing ability to help organizations secure both human and non-human identities is becoming a major competitive advantage. During its last earnings call, the company highlighted that the recent boom in AI agents has resulted in a tremendous rise in machine identities, and its Identity Security Posture Management and Privileged Access solutions have the capabilities to address this problem. Also, Okta’s newly introduced suite-based pricing model is expected to encourage customers to consolidate identity solutions with Okta, driving cross-sell opportunities for the company.

However, Okta’s revenue growth has moderated to a low-teen percentage range, down from mid-teen percentage of 15%, which it used to enjoy in fiscal 2025. Additionally, for fiscal 2026, OKTA expects revenues between $2.875 billion and $2.885 billion, indicating 10-11% growth from the figure reported in fiscal 2025. The Zacks Consensus Estimate for both fiscal 2026 and 2027 revenues is pegged at $2.88 billion and $3.15 billion, indicating a year-over-year increase of approximately 10.3% and 9.3%, respectively.

Price Performance and Valuation of CRWD and OKTA

Year to date, CrowdStrike shares have appreciated 43.2%, while Okta shares have gained 18.4%.

YTD Price Return Performance

Okta is trading at a forward sales multiple of 5.34X, below the security industry’s 13.28X. CrowdStrike is trading at a forward sales multiple of 22.48X. CrowdStrike does seem pricey compared with Okta. However, CrowdStrike’s valuations also reflect higher growth expectations for the company.

Forward 12-Month P/S Ratio

Conclusion: Buy CRWD Right Now

As businesses continue to prioritize AI-driven cybersecurity solutions, CrowdStrike’s leadership in threat prevention, response and recovery will only strengthen. With stronger growth momentum and a sharper focus on emerging threats, CrowdStrike appears better positioned and more attractive for investors at present.

Meanwhile, Okta continues to strengthen its leadership in identity security and is broadening its platform through governance, privileged access, and AI-driven solutions. However, its revenue growth has moderated to a low-teens percentage range, down from the mid-teens percentage range it used to enjoy in fiscal 2025.

Currently, CrowdStrike flaunts a Zacks Rank #1 (Strong Buy), making the stock a must-pick compared to Okta, which has a Zacks Rank #4 (Sell).

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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