Morningstar

Zscaler Inc ZS

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Stock XNAS Rating as of
$171.77 +0.84 (0.49%)
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As of Delayed Price Closed

Company Report

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Zscaler Earnings: Weak Outlook for Fiscal 2025 Doesn’t Diminish Our Long-Term View on Zscaler

Malik Ahmed Khan

We are maintaining our $213 fair value estimate for narrow-moat Zscaler after the firm closed out fiscal 2024 with a robust set of financial results offset by weaker-than-expected top-line guidance for the upcoming fiscal 2025. As in previous quarters, we continue to be impressed by Zscaler’s strong execution in its emerging products category, which offers the firm a new leg of top-line growth over the medium term. In a fragmented security market, we believe large vendors, such as Zscaler, have a large consolidation opportunity ahead of them as customers increasingly turn toward multisolution vendors at the expense of point-solution providers.

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Price vs Fair Value

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ZS is trading at a 693% premium.
Price
$171.77
Fair Value
$786.00
Uncertainty
High
1-Star Price
$355.17
5-Star Price
$374.70
Economic Moat
Xdpsw
Capital Allocation
Mvzbgdhtc

Bulls Say, Bears Say

Bulls

Zscaler has strong secular tailwinds behind its back as the convergence of networking and the security market is in its early innings.

Bears

Large public cloud vendors often offer their own cybersecurity solutions, which could hamper Zscaler’s growth opportunities.

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News

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Trading Information

Previous Close Price
$170.93
Day Range
$171.30–173.83
52-Week Range
$146.71–259.61
Bid/Ask
$171.30 / $171.76
Market Cap
$26.19 Bil
Volume/Avg
953,326 / 1.9 Mil

Key Statistics

Price/Earnings (Normalized)
53.84
Price/Sales
11.85
Dividend Yield (Trailing)
0.00%
Dividend Yield (Forward)
0.00%
Total Yield
—

Company Profile

Zscaler is a software-as-a-service, or SaaS, firm focusing on providing cloud-native cybersecurity solutions to primarily enterprise customers. Zscaler’s offerings can be broadly partitioned into Zscaler Internet Access, which provides secure access to external applications, and Zscaler Private Access, which provides secure access to internal applications. The firm is headquartered in San Jose, California, and went public in 2018.
Sector
Technology
Industry
Software - Infrastructure
Stock Style Box
Mid Growth
Total Number of Employees
7,348
Website
https://www.zscaler.com

Competitors

Valuation

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Metric
ZS
PANW
CSCO
Price/Earnings (Normalized)
 53.8459.2114.21
Price/Book Value
 20.5621.114.67
Price/Sales
 11.8514.814.00
Price/Cash Flow
 36.0050.6314.19
Price/Earnings
ZS
PANW
CSCO

Financial Strength

Metric
ZS
PANW
CSCO
Quick Ratio
 1.010.770.69
Current Ratio
 1.090.890.91
Interest Coverage
 −9.54140.6711.80
Quick Ratio
ZS
PANW
CSCO

Profitability

Metric
ZS
PANW
CSCO
Return on Assets (Normalized)
 12.65%11.39%13.79%
Return on Equity (Normalized)
 52.28%54.37%33.36%
Return on Invested Capital (Normalized)
 19.66%30.96%23.37%
Return on Assets
ZS
PANW
CSCO

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