Buy CrowdStrike or Okta Shares After Achieving Unprecedented Profits?

Cybersecurity Leaders Outperform Amid Market Turbulence

Despite recent fluctuations in the broader market, cybersecurity companies CrowdStrike (CRWD) and Okta (OKTA) have distinguished themselves by surpassing their fourth-quarter projections.

Following their Q4 earnings announcements earlier this week, both CrowdStrike and Okta saw their share prices jump over 10%.

Their quarterly results featured record profits, robust revenue increases, expanding bases of recurring income, and heightened demand for cybersecurity and identity management solutions.

Source: Zacks Investment Research

CrowdStrike: Accelerating AI-Powered Security

CrowdStrike’s first-quarter performance was propelled by rapid growth, driven by rising interest in its Falcon platform as AI-related cyber threats become increasingly advanced.

Falcon, a cloud-based security solution, offers sophisticated endpoint detection and response (EDR), managed detection and response (MDR), and next-generation antivirus tools to safeguard organizations against digital attacks.

Falcon’s expansion contributed to CrowdStrike’s Q4 revenue reaching $1.3 billion—a 24% increase year-over-year and above analyst forecasts. The company’s net new annual recurring revenue (ARR) soared 47% to a quarterly high of $331 million. Since its IPO in 2019, CrowdStrike achieved record profitability, with Q4 earnings per share climbing 9% to $1.12, outpacing expectations.

Okta: Growth in Enterprise Adoption and Platform Integration

Okta’s Q4 results were marked by consistent subscription growth, broader enterprise uptake, and strong cash flow, reflecting the success of its unified identity security platform.

This integrated platform enables clients to securely connect with a wide range of applications, services, and cloud environments. The surge in adoption among large enterprises highlights Okta’s reputation as organizations modernize their security frameworks.

Okta reported an 11% year-over-year increase in Q4 revenue to $761 million, beating estimates. Remaining performance obligations (RPO) rose 15%, with current RPO up 12%, signaling strong future revenue potential. Okta also achieved record profitability, with Q4 EPS up 15% to $0.90, exceeding forecasts. Free cash flow for the quarter grew 11% to a record $252 million.

Annual Performance and Outlook

CrowdStrike closed out a milestone year, with annual revenue up 22% to $4.81 billion and full-year EPS rising to $3.73 from $0.49. Annual recurring revenue increased 24% to $5.25 billion.

Looking ahead, CrowdStrike anticipates Q1 revenue for fiscal year 2027 to be approximately $1.36 billion, reflecting 23%-24% growth. The company expects Q1 ARR to reach $5.5 billion, a 24% increase, with net new ARR projected between $249 million and $251 million.

Source: Zacks Investment Research

Okta also achieved record highs in fiscal year 2026, with annual revenue up 12% to $2.92 billion and EPS jumping to $3.50 from $0.40 in the previous year. For Q1 of fiscal year 2027, Okta expects revenue growth of 9%, current RPO growth of 10%, a non-GAAP operating margin between 23% and 24%, and free cash flow margin ranging from 33% to 35%.

For the full fiscal year 2027, Okta projects annual revenue growth of 9%, a non-GAAP operating margin of 25%-26%, and free cash flow margin of 27%-28%.

Source: Zacks Investment Research

Investor Takeaways

Investors have been captivated by the impressive growth trajectories of CrowdStrike and Okta, especially as both companies have eased concerns about AI’s impact on SaaS demand. However, Okta may appeal more to value-focused investors, trading at a forward price-to-earnings ratio of 21, compared to CrowdStrike’s premium valuation of 87.

Currently, Okta holds a Zacks Rank #1 (Strong Buy), while CrowdStrike is rated Zacks Rank #3 (Hold).

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