About this episode

The episode compares CrowdStrike and Zscaler's financial performances and market valuations in the cybersecurity sector.

Both CrowdStrike (NASDAQ:CRWD) and Zscaler (NASDAQ:ZS) just reported strong results, 24% ARR growth and a 34% free cash flow margin for CrowdStrike, and 25% revenue growth with 600%+ year-over-year flexible booking growth for Zscaler. But the stocks couldn't be more different: CrowdStrike is up 56% over the last 12 months trading at 128x free cash flow, while Zscaler is down 54% and now trading at just 24x free cash flow. Simon Erickson breaks down what's actually driving the divergence and which one he'd buy today.The key story in both earnings reports is Falcon Flex and Z Flex, flexible subscription platforms that let enterprise customers bundle modules and swap product lines without being locked into rigid contracts. CrowdStrike's Falcon Flex is now $2 billion of its $5.5 billion ARR, up 99% year over year, with 26% of customers proactively renewing early. Zscaler's Z Flex bookings jumped from $65 million to $480 million in a single year. This flexibility is becoming the dominant go-to-market model in cybersecurity, and both companies are executing it well.So why is Zscaler so cheap? Conservative 2027 guidance of 15-16% growth, partly because of its Red Canary acquisition for…

People in this episode

Host: Simon Erickson

Topics covered

• cybersecurity
• stock analysis
• financial performance
• ARR growth
• market valuation
• subscription models

Keywords

• CrowdStrike
• Zscaler
• cybersecurity stocks
• ARR growth
• free cash flow
• market valuation
• subscription platforms

Mentioned in this episode

Organizations: CrowdStrike, Zscaler, Red Canary

Products: Falcon Flex, Z Flex

Places: NASDAQ

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