company background image
ZS

Zscaler NasdaqGS:ZS Stock Report

Last Price

US$178.71

Market Cap

US$25.4b

7D

10.3%

1Y

-26.4%

Updated

11 Aug, 2022

Data

Company Financials +
ZS fundamental analysis
Snowflake Score
Valuation2/6
Future Growth3/6
Past Performance0/6
Financial Health5/6
Dividends0/6

ZS Stock Overview

Zscaler, Inc. operates as a cloud security company worldwide.

Zscaler Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Zscaler
Historical stock prices
Current Share PriceUS$178.71
52 Week HighUS$376.11
52 Week LowUS$125.12
Beta1.03
1 Month Change18.41%
3 Month Change16.63%
1 Year Change-26.44%
3 Year Change125.70%
5 Year Changen/a
Change since IPO441.54%

Recent News & Updates

Jul 26

Zscaler downgrade hits cyber security stocks as BTIG sees signs of slowdown

Zscaler (NASDAQ:ZS) shares fell more than 9% on Tuesday as investment firm BTIG downgraded the cyber security company, hitting other stocks in the sector. Analyst Gray Powell noted that Zscaler (ZS) shares are trading at more than 13 times enterprise value-to-sales and though the company likely had a solid second-quarter, independent field checks "downticked from prior quarters and lead us to believe sales cycles will elongate over the next 6-12 months." Several other cyber security stocks fell as a result, including Palo Alto Networks (NASDAQ:PANW), Check Point Software (NASDAQ:CHKP) and CyberArk (CYBR), which lost 7.5%, 3.5% and 4%, respectively. Other cyber security companies, such as CrowdStrike (NASDAQ:CRWD), Tenable (TENB) and Fortinet (FTNT) also saw heavy losses on Tuesday, falling more than 7%, 5% and 8.5%, respectively. Earlier this month, Wedbush Securities added Fortinet (FTNT) and Checkpoint Software Technologies (CHKP) to the firm's best ideas list after it said it had not seen any signs of a major growth slowdown for the space.

Jul 22
Is There An Opportunity With Zscaler, Inc.'s (NASDAQ:ZS) 40% Undervaluation?

Is There An Opportunity With Zscaler, Inc.'s (NASDAQ:ZS) 40% Undervaluation?

How far off is Zscaler, Inc. ( NASDAQ:ZS ) from its intrinsic value? Using the most recent financial data, we'll take a...

Jul 04
Is Zscaler (NASDAQ:ZS) Using Too Much Debt?

Is Zscaler (NASDAQ:ZS) Using Too Much Debt?

Howard Marks put it nicely when he said that, rather than worrying about share price volatility, 'The possibility of...

Shareholder Returns

ZSUS SoftwareUS Market
7D10.3%-0.9%1.3%
1Y-26.4%-16.6%-11.7%

Return vs Industry: ZS underperformed the US Software industry which returned -14.6% over the past year.

Return vs Market: ZS underperformed the US Market which returned -11.6% over the past year.

Price Volatility

Is ZS's price volatile compared to industry and market?
ZS volatility
ZS Average Weekly Movement11.4%
Software Industry Average Movement10.5%
Market Average Movement7.8%
10% most volatile stocks in US Market16.9%
10% least volatile stocks in US Market3.2%

Stable Share Price: ZS is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 11% a week.

Volatility Over Time: ZS's weekly volatility (11%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
20073,153Jay Chaudhryhttps://www.zscaler.com

Zscaler, Inc. operates as a cloud security company worldwide. The company provides Zscaler Internet Access solution that provides users, servers, operational technology, Internet of Things device secure access to externally managed applications, including software-as-a-service (SaaS) applications and Internet destinations; and Zscaler Private Access solution, which is designed to provide access to managed applications hosted internally in data centers, and private or public clouds. It also offers Zscaler Digital Experience that measures end-to-end user experience across business applications, as well as provides an easy to understand digital experience score for each user, application, and location within an enterprise.

Zscaler Fundamentals Summary

How do Zscaler's earnings and revenue compare to its market cap?
ZS fundamental statistics
Market CapUS$25.35b
Earnings (TTM)-US$373.65m
Revenue (TTM)US$969.96m

26.1x

P/S Ratio

-67.9x

P/E Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
ZS income statement (TTM)
RevenueUS$969.96m
Cost of RevenueUS$217.83m
Gross ProfitUS$752.13m
Other ExpensesUS$1.13b
Earnings-US$373.65m

Last Reported Earnings

Apr 30, 2022

Next Earnings Date

Sep 08, 2022

Earnings per share (EPS)-2.63
Gross Margin77.54%
Net Profit Margin-38.52%
Debt/Equity Ratio179.6%

How did ZS perform over the long term?

See historical performance and comparison
We’ve recently updated our valuation analysis.

Valuation

Is ZS undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

  • Price-To-Sales vs Peers

  • Price-To-Sales vs Industry

  • Price-To-Sales vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for ZS?

Other financial metrics that can be useful for relative valuation.

ZS key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue25.5x
Enterprise Value/EBITDA-87.1x
PEG Ration/a

Price to Sales Ratio vs Peers

How does ZS's PS Ratio compare to its peers?

ZS PS Ratio vs Peers
The above table shows the PS ratio for ZS vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPSEstimated GrowthMarket Cap
Peer Average13.9x
CRWD CrowdStrike Holdings
28.1x25.9%US$46.0b
FTNT Fortinet
10.9x18.5%US$41.4b
PANW Palo Alto Networks
10x16.7%US$51.5b
CHKP Check Point Software Technologies
6.7x4.1%US$15.2b
ZS Zscaler
26.1x23.6%US$25.4b

Price-To-Sales vs Peers: ZS is expensive based on its Price-To-Sales Ratio (26.1x) compared to the peer average (13.9x).


Price to Earnings Ratio vs Industry

How does ZS's PE Ratio compare vs other companies in the US Software Industry?

Price-To-Sales vs Industry: ZS is expensive based on its Price-To-Sales Ratio (26.1x) compared to the US Software industry average (5.2x)


Price to Sales Ratio vs Fair Ratio

What is ZS's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

ZS PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio26.1x
Fair PS Ratio16.3x

Price-To-Sales vs Fair Ratio: ZS is expensive based on its Price-To-Sales Ratio (26.1x) compared to the estimated Fair Price-To-Sales Ratio (16.3x).


Share Price vs Fair Value

What is the Fair Price of ZS when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: ZS ($178.71) is trading below our estimate of fair value ($357.75)

Significantly Below Fair Value: ZS is trading below fair value by more than 20%.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.


Discover undervalued companies

Future Growth

How is Zscaler forecast to perform in the next 1 to 3 years based on estimates from 28 analysts?

Future Growth Score

3/6

Future Growth Score 3/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


24.1%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ZS is forecast to remain unprofitable over the next 3 years.

Earnings vs Market: ZS is forecast to remain unprofitable over the next 3 years.

High Growth Earnings: ZS is forecast to remain unprofitable over the next 3 years.

Revenue vs Market: ZS's revenue (23.6% per year) is forecast to grow faster than the US market (8% per year).

High Growth Revenue: ZS's revenue (23.6% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ZS's Return on Equity is forecast to be high in 3 years time (28%)


Discover growth companies

Past Performance

How has Zscaler performed over the past 5 years?

Past Performance Score

0/6

Past Performance Score 0/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


-52.5%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: ZS is currently unprofitable.

Growing Profit Margin: ZS is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: ZS is unprofitable, and losses have increased over the past 5 years at a rate of 52.5% per year.

Accelerating Growth: Unable to compare ZS's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: ZS is unprofitable, making it difficult to compare its past year earnings growth to the Software industry (18.3%).


Return on Equity

High ROE: ZS has a negative Return on Equity (-70.29%), as it is currently unprofitable.


Discover strong past performing companies

Financial Health

How is Zscaler's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Stable Cash Runway

  • Forecast Cash Runway

Financial Position Analysis

Short Term Liabilities: ZS's short term assets ($2.0B) exceed its short term liabilities ($912.6M).

Long Term Liabilities: ZS's short term assets ($2.0B) exceed its long term liabilities ($1.1B).


Debt to Equity History and Analysis

Debt Level: ZS has more cash than its total debt.

Reducing Debt: Insufficient data to determine if ZS's debt to equity ratio has reduced over the past 5 years.


Balance Sheet


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable ZS has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: ZS is unprofitable but has sufficient cash runway for more than 3 years, due to free cash flow being positive and growing by 65.3% per year.


Discover healthy companies

Dividend

What is Zscaler current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate ZS's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate ZS's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if ZS's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if ZS's dividend payments have been increasing.


Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as ZS has not reported any payouts.


Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

1.2yrs

Average management tenure


CEO

Jay Chaudhry (63 yo)

14.92yrs

Tenure

US$19,999,160

Compensation

Mr. Jagtar S. Chaudhry, also known as Jay, is the Co-Founder of Zscaler, Inc. and has been its Chief Executive Officer and Chairman of the Board since September 2007 and serves as its Director since 2007 a...


CEO Compensation Analysis

Compensation vs Market: Jay's total compensation ($USD20.00M) is above average for companies of similar size in the US market ($USD12.88M).

Compensation vs Earnings: Jay's compensation has increased whilst the company is unprofitable.


Leadership Team

Experienced Management: ZS's management team is not considered experienced ( 1.2 years average tenure), which suggests a new team.


Board Members

Experienced Board: ZS's board of directors are considered experienced (5.7 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: ZS insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 3.6%.


Top Shareholders

Company Information

Zscaler, Inc.'s employee growth, exchange listings and data sources


Key Information

  • Name: Zscaler, Inc.
  • Ticker: ZS
  • Exchange: NasdaqGS
  • Founded: 2007
  • Industry: Systems Software
  • Sector: Software
  • Implied Market Cap: US$25.352b
  • Shares outstanding: 141.86m
  • Website: https://www.zscaler.com

Number of Employees


Location

  • Zscaler, Inc.
  • 120 Holger Way
  • San Jose
  • California
  • 95134
  • United States

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/08/11 00:00
End of Day Share Price2022/08/11 00:00
Earnings2022/04/30
Annual Earnings2021/07/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.