Cybersecurity's Trio: Why CrowdStrike, CyberArk, and Zscaler Are Top Picks Ahead of 2025 Earnings

As cybersecurity threats evolve, so do the strategies of firms racing to protect businesses in an AI-driven world. Oppenheimer’s 2025 outlook has cemented CrowdStrike (CRWD), CyberArk (CYBR), and Zscaler (ZS) as top picks for investors, fueled by robust earnings, strategic acquisitions, and a growing demand for advanced security solutions. These three companies are poised to capitalize on their strengths ahead of critical 2025 earnings reports, but their paths to success diverge in intriguing ways.

Zscaler: Navigating Billings Headwinds with AI Momentum

Zscaler’s 2024 was rocky—its shares fell 18.3% year-to-date—as investors grew wary of slower billings growth. Yet Oppenheimer remains bullish, assigning an Outperform rating with a $250 price target. Analysts highlight Zscaler’s “attractive billings setup” for 2025, driven by emerging AI-driven security products like its Safe AI platform, which helps enterprises manage risks tied to generative AI usage.

Q1 FY25 earnings showed resilience: revenue surged 26% YoY to $628 million, while billings grew 13% to $516.7 million. Despite a post-earnings dip, analysts like Jefferies and Citi raised price targets, citing reduced execution risk and a return to “beat-and-raise cadence.” Zscaler’s 2025 revenue target of $2.64 billion (+21.7% YoY) is backed by a forward P/S ratio of 10.73x, which, while below its five-year average, remains well above sector peers.

CrowdStrike: Post-Outage Resilience and Premium Valuation

CrowdStrike’s 2024 was a comeback story. Shares rose 34%, outpacing the market, as the company rebounded from a July 2024 outage that rattled investors. Analysts now see the incident as a catalyst for customer retention: net retention hit 115% as clients signed commitment packages, boosting recurring revenue.

Q3 FY25 revenue hit $1.01 billion (+29% YoY), with ARR surpassing $4 billion. However, margin pressures linger due to commitment incentives, and adjusted EPS fell slightly short of estimates. Despite this, Jefferies’ $450 price target reflects confidence in CrowdStrike’s endpoint dominance and AI integration. Its 2025 revenue target of $3.93 billion (+28.6%) supports a sector-leading 22.25x forward P/S ratio, though some analysts caution about near-term margin dilution.

CyberArk: Venafi’s Boost and Machine Identity Dominance

CyberArk’s 2024 was a standout: shares jumped 53%, fueled by its $1.5 billion acquisition of Venafi, a leader in machine identity protection. This move amplified CyberArk’s ability to secure AI-driven systems, a critical need as enterprises adopt generative AI tools.

Q3 FY25 results were stellar: revenue rose 25.6% to $240.1 million, while ARR hit $926 million (+31% YoY). The Venafi deal added $150 million in recurring revenue, and 79% of ARR now comes from subscriptions. Analysts at Jefferies and Oppenheimer see CyberArk as a “strong buy”, with a $400 price target and a 2025 revenue target of $989 million (+32% YoY). Its forward P/S ratio of 14.16x reflects optimism around its $2 billion 2028 subscription revenue target.

Comparative Outlook: Where the Upside Lies

The table below summarizes analyst consensus and targets:

Conclusion: Betting on Cybersecurity’s Future

While all three firms are rated Buy/Strong Buy, the choice hinges on risk tolerance and time horizon:
- Zscaler offers the highest upside (23.3%) but faces near-term billings challenges. Its AI innovations, however, position it for long-term leadership in enterprise security.
- CrowdStrike retains its premium valuation despite margin pressures, making it a “must-have” for growth portfolios.
- CyberArk stands out for its machine identity security dominance, with Venafi’s synergies and a 25.1% upside in some analyst estimates.

The key theme is clear: cybersecurity is no longer an afterthought but a mission-critical spend in an AI-driven economy. With $2.64 billion to $3.93 billion in revenue targets and consensus upgrades across the board, these three stocks are not just top picks—they’re pillars of the next wave of digital defense.

Investors looking to capitalize on cybersecurity’s growth should weigh Zscaler’s high-risk/high-reward profile, CrowdStrike’s entrenched market position, and CyberArk’s strategic acquisitions. All three, however, share one common denominator: they’re bets on a future where security isn’t optional—it’s everything.