CrowdStrike’s CRWD identity security business is becoming an important growth driver. On the fourth quarter of fiscal 2026 earnings call, CrowdStrike stated that its Next-Gen Identity business ended fiscal 2026 with over $520 million in annual recurring revenues (ARR), growing more than 34% year over year and outpacing the company’s overall ARR growth of 24%.
The growth is being supported by the rising demand for identity protection. Management stated identity remains one of the biggest breach vectors, with many cyberattacks now relying on compromised credentials rather than malware. As enterprises manage more employees, cloud applications, SaaS tools and machine identities, protecting access points is becoming more important. This is increasing demand for identity threat detection and response, privileged access management and SaaS identity protection.
CrowdStrike is seeing strong traction across products within this segment. CrowdStrike's privileged account security solution grew more than 170% on a sequential basis, while Falcon Shield, which protects SaaS identities, grew more than 300% year over year in the fourth quarter. CrowdStrike also shared a seven-figure customer win with a major department store, where the customer selected CrowdStrike’s identity offerings over an SMB point product vendor. These wins suggest the company is gaining traction as customers consolidate identity tools onto the Falcon platform.
The recently completed acquisition of SGNL.ai enables CrowdStrike to add real-time authorization and zero standing privilege capabilities to the Falcon platform. This should help CrowdStrike strengthen its identity security offering as enterprises deal with a rising number of both human and non-human identities. With strong growth, product traction and a larger market need, identity security appears well-positioned to become a bigger contributor to CrowdStrike’s overall future growth.
The Zacks Consensus Estimate for fiscal 2027 and 2028 revenues indicates a year-over-year increase of around 22.8% and 21.2%, respectively.
How Competitors Fare Against CRWD
Competitors like Okta Inc. OKTA and Palo Alto Networks PANW are also gaining ground through platform expansion and AI innovation.
Okta is best known for its identity and access management solutions. Okta has been adding AI-driven tools that automate risk detection and reduce manual processes in managing user access. Enterprises can implement Identity Threat Protection with Okta AI to leverage AI and machine learning techniques for real-time detection of the entire spectrum of Identity attacks.
Palo Alto Networks' acquisition of CyberArk has strengthened PANW’s foothold in a category where it previously lacked scale. PANW has already built out capabilities in endpoint and network security through its Cortex and Prisma platforms. However, identity-driven threat protection has remained a weaker link. By integrating CyberArk’s capabilities, Palo Alto Networks is now able to deliver a more comprehensive and unified platform that spans cloud, endpoint, network and identity protection.
CRWD’s Price Performance, Valuation and Estimates
Shares of CrowdStrike have lost 9.1% in the year-to-date period compared with the Zacks Security industry’s decline of 9%.
CRWD YTD Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, CrowdStrike trades at a forward price-to-sales ratio of 17.51, significantly higher than the industry’s average of 10.54. The Zacks Value Score of F also suggests that CRWD stock is overvalued.
CRWD Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for CrowdStrike’s fiscal 2027 and 2028 earnings indicates year-over-year growth of 30% and 26.9%, respectively. The estimates for fiscal 2027 and 2028 have both been revised upward over the past 60 days.
Image Source: Zacks Investment Research
CrowdStrike currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).