2 Stocks Set to Outpace Palo Alto Networks in 2 Years

In the dynamic world of cybersecurity, two stocks have emerged as strong contenders to outpace Palo Alto Networks (PANW) in the next two years. CrowdStrike (CRWD) and Palo Alto Networks have both experienced ups and downs, but their growth prospects and strategic moves position them well for future success.

CrowdStrike's rapid revenue growth, strong customer retention, and upsell opportunities make it a formidable competitor. Despite a recent outage, the company has maintained a high gross retention rate of 97% and is turning the incident into an upsell opportunity by offering additional modules and Flex dollars to customers. This strategy could lead to greater adoption and increased revenue in the future.

Palo Alto Networks, on the other hand, is shifting customers onto its three broader cybersecurity platforms and away from point solutions. This platformization strategy is expected to pressure top-line revenue and billings growth in the near term but is seen as a long-term growth driver. The company's AI capabilities and growing demand for cybersecurity services also position it well for future growth.



While both stocks have experienced ups and downs, their current valuations reflect their respective growth potential and risk profiles. CrowdStrike's higher valuation is justified by its strong revenue growth and potential for future upselling, while Palo Alto Networks' lower valuation is a result of its strategic shift and the near-term pressure on its top-line revenue and billings growth.

In conclusion, both CrowdStrike and Palo Alto Networks have the potential to outpace Palo Alto Networks in the next two years, thanks to their unique growth drivers and strategic moves. Investors should closely monitor these companies' progress and performance as they continue to shape the cybersecurity landscape.

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