What happened

Investors in cybersecurity company CrowdStrike Holdings (CRWD 0.28%) had a rough day on Wednesday, as investors failed to reward management's reporting one earnings beat -- and promising another -- with the kind of higher stock price you'd expect. Instead of going up, CrowdStrike went down -- a lot! -- losing about 15% of its market capitalization before the day was done.

That's the bad news. The good news is that today, CrowdStrike is winning back some of its losses, as its stock rises 3.6% through 11:25 a.m. ET. You can thank London-based equity research firm Redburn for that.

So what

As StreetInsider reports, Redburn took advantage of CrowdStrike's new and improved stock price this morning to initiate coverage of the stock. Redburn gave CrowdStrike a buy rating and a $175 price target, suggesting CrowdStrike stock could gain as much as 44% over the next 12 months.    

And why did Redburn do this?

"We see CrowdStrike continuing to gain market share from legacy antivirus vendors," explains Redburn, arguing further that the company's "scalable platform" makes CrowdStrike's products attractive to customers wanting to consolidate their internet security efforts among fewer vendors. Redburn sees this trend providing a long-term tailwind to CrowdStrike's business. And the company's warning yesterday, about annual recurring revenue (ARR) falling a bit short of expectations in the fourth quarter, provides a nice entry price into the stock.

Now what

And I don't totally disagree with that. While on the one hand, CrowdStrike spooked investors yesterday with its warning that ARR could be about 10% lower in Q4 than it was in the third quarter, that's just one quarter's results in the company's multiyear, or multidecade, lifetime -- and this number isn't even set in stone yet. Redburn's right to focus on the big picture and the long term and not fixate on a single quarter's results, even if those results might be a bit disappointing.

That being said, after examining the valuations on CrowdStrike and its competition yesterday, it still seems pretty clear to me that there's a better bargain in cybersecurity than CrowdStrike stock.

Valued at $28.5 billion after Wednesday's sell-off, CrowdStrike stock costs nearly 46 times trailing free cash flow -- almost cheap enough to get me to buy if the company delivers on the 40.5% long-term earnings growth rate that Wall Street projects for it. But the thing about the stock market is that, just because you find a stock with a good stock price available to you, doesn't mean you can't pass on it in favor of another stock with an even better price. And in CrowdStrike rival Palo Alto Networks (PANW -0.78%), I think I've found a better bargain.

Despite having a market capitalization nearly twice CrowdStrike's, Palo Alto Networks' strong free cash flow (FCF) means that its stock is valued at just 21.5 times FCF -- less than half CrowdStrike's valuation. With a projected long-term earnings growth rate of 29%, Palo Alto Networks may not be growing as fast as CrowdStrike, but relative to its valuation, the stock is a better bargain with a price-to-free-cash-flow ratio of just 0.74, versus CrowdStrike's 1.1.

Long story short, Redburn may be right that CrowdStrike is a buy after its sell-off Wednesday. But Palo Alto Networks is still a better value stock for cybersecurity investors.