Can Strong Momentum in Next-Gen SIEM Boost CRWD's Long-Term Growth?

CrowdStrike’s CRWD Next-Gen Security Information and Event Management (SIEM) business continued to grow strongly in the second quarter of fiscal 2027. Ending annual recurring revenue (ARR) for the business surpassed $695 million, while quarterly net new ARR reached a record level. The results show that Next-Gen SIEM is becoming an important part of CrowdStrike’s broader platform.

CrowdStrike is seeing demand from both new and existing customers. Management said that more customers are standardizing on Falcon as the operating system for the security operations center (SOC). The company believes its first-party data advantage and the speed and efficiency of its platform are helping it compete with traditional SIEM products.

CrowdStrike is also competing on cost. Management said Next-Gen SIEM has a disruptive price point because of how the company charges for first-party data generated by its platform. The company sees this as a way to offer faster deployment and better value compared with legacy SIEM products. In the second quarter, a major American power provider replaced a legacy acquired SIEM with CrowdStrike’s Next-Gen SIEM in an eight-figure Falcon Flex deal. Management said the customer selected the product based on its technical capabilities, speed and economics.

The growth of AI could support further demand for Next-Gen SIEM. CrowdStrike said security teams need to monitor activity across AI agents, SaaS, cloud and identity because attacks can move across different environments. This increases the need for a platform like Next-Gen SIEM that can bring security data together. The above-mentioned factors show that continued platform adoption, legacy SIEM replacements and rising AI-related security needs should help Next-Gen SIEM remain an important driver of CRWD's long-term growth.

How Competitors Fare Against CRWD

Competitors like Palo Alto Networks PANW and SentinelOne S are also gaining ground through platform expansion and AI innovation.

In the third quarter of fiscal 2026, Palo Alto Networks saw robust growth in its Next-Gen Security ARR, which increased 60% year over year. The growth was driven by increased customer adoption of PANW’s advanced cybersecurity offerings, including its AI-driven XSIAM platform, SASE and software firewalls.

Though comparatively a small competitor, SentinelOne posted second-quarter fiscal 2027 year-over-year growth of 22% in its ARR. The growth was fueled by the rising adoption of SentinelOne’s AI-first Singularity platform and Purple AI.

CRWD’s Price Performance, Valuation and Estimates

Shares of CrowdStrike have jumped 94.5% in the year-to-date period compared with the Zacks Security industry’s return of 65.4%.

CRWD YTD Price Return Performance

Image Source: Zacks Investment Research

From a valuation standpoint, CrowdStrike trades at a forward price-to-sales ratio of 34.77, significantly higher than the industry’s average of 16.77. 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 32.3% and 27.1%, respectively. The estimates for fiscal 2027 and 2028 have remained unchanged over the past 30 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).

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