One-glance verdict
Within fair range
$233.74 our estimate vs market $207.38
Wall Street consensus: $233.72 (-0.0% lower than our fair-value estimate)
11% below our estimate
Fundamentals snapshot
Zscaler, Inc.
ZS · NMS · Technology · Software - Infrastructure
Current price
$207.38
52-week range
$114.62 - $336.99
Market cap
$33.81B
Balance sheet
Healthy
-33.39x Concerning
Net cash $1.61B. Interest coverage shows how many times profit covers the interest bill.
What stands out
2 Rewards
1 Risk
2 rewards · 1 risks
- Reward Revenue grew 25.4% last year.
- Reward Free cash flow was positive in 9/10 years.
- Risk Return on equity was -2.9% last year — the company lost money on shareholders' equity.
What this company does
Zscaler, Inc.
Zscaler is a cybersecurity company that acts like a smart security guard for a business's internet traffic, protecting them from online threats. It makes money primarily by selling subscriptions to these security services, which creates predictable recurring revenue (money that the company can count on coming in regularly, like a phone bill). This is important because as more people work from home and use cloud applications, businesses need a way to keep their data safe no matter where their employees are.
How the company got here
Zscaler was founded in 2007 with the idea that traditional security, like firewalls that protect a company's physical office, was becoming outdated. The founders saw that work was moving to the cloud and employees were no longer always in the office, so they created a security platform delivered entirely from the cloud. This new approach, called a "zero trust" model (which means no one is trusted by default, and every attempt to access company resources is checked), was designed to protect users and data no matter where they were. The company went public with an IPO (Initial Public Offering, the first time a private company sells its stock to the public) in 2018 and has grown by attracting large corporate and government customers.
What it actually does
Imagine a security checkpoint for the internet that isn't a box in your office but a service in the cloud that follows you everywhere. Zscaler acts like this checkpoint, inspecting all the data flowing between a company's employees and devices and the applications they use, whether on the public internet or inside the company's private network. It protects against online threats, stops sensitive data from leaking out, and makes sure only authorized people can access specific applications. This replaces the need for older technologies like VPNs (Virtual Private Networks, which create a secure tunnel to a corporate network), which can be slow and less secure for a workforce that is often remote.
Zscaler Zero Trust Exchange
This is the company's single, unified platform and its only business segment. Instead of selling different unrelated products, Zscaler sells subscriptions to various services that all run on this core platform. Companies pay recurring fees, usually based on the number of employees and the specific services they use. The two main pillars are Zscaler Internet Access (ZIA), which secures employees' connections to the internet and cloud apps, and Zscaler Private Access (ZPA), which securely connects users to a company's internal applications without putting them on the corporate network. This subscription model provides the company with predictable, recurring revenue.
What management is betting on now
Zscaler is heavily focused on expanding the use of its platform beyond just securing user access, aiming to protect all of a company's digital communications, including those between different cloud applications and devices. A major priority is artificial intelligence (AI), both in using AI to better detect threats and in providing security for companies as they adopt AI tools themselves. Management is also pushing to get existing customers to adopt more of its services, increasing the value of each customer over time. The company continues to make strategic acquisitions (buying smaller companies) to quickly add new technologies and capabilities to its platform.
Price history
How the share price has moved
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Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2025 Q1
$314.31M
FY2025 Q2
$164.41M
FY2025 Q3
$138.92M
FY2025 Q4
$190.56M
FY2026 Q1
$430.97M
FY2026 Q2
$186.32M
FY2026 Q3
$155.62M
FY2026 Q4
$79.45M
Revenue
$898.18M
Net income
$-3.37M
Diluted EPS
-0.02
Operating cash flow
$279.29M
Free cash flow
$79.45M
Fetching…
Sources
Revenue
$850.48M
Net income
$-13.88M
Diluted EPS
-0.09
Operating cash flow
$198.02M
Free cash flow
$155.62M
Fetching…
Sources
Revenue
$815.75M
Net income
$-34.31M
Diluted EPS
-0.21
Operating cash flow
$204.07M
Free cash flow
$186.32M
Fetching…
Sources
Revenue
$788.11M
Net income
$-11.62M
Diluted EPS
-0.07
Operating cash flow
$448.28M
Free cash flow
$430.97M
Fetching…
Sources
Revenue
$719.23M
Net income
$-17.58M
Diluted EPS
-0.11
Operating cash flow
$250.60M
Free cash flow
$190.56M
Fetching…
Sources
Revenue
$678.03M
Net income
$-4.12M
Diluted EPS
-0.03
Operating cash flow
$211.08M
Free cash flow
$138.92M
Fetching…
Sources
Revenue
$647.90M
Net income
$-7.72M
Diluted EPS
-0.05
Operating cash flow
$179.43M
Free cash flow
$164.41M
Fetching…
Sources
Revenue
$627.96M
Net income
$-12.05M
Diluted EPS
-0.08
Operating cash flow
$331.33M
Free cash flow
$314.31M
Fetching…
Sources
Is it cheap or expensive?
Fair value $233.74 vs current price $207.38
Wall Street consensus is the average analyst price target: $233.72 (-0.0% lower than our fair-value estimate).
Our most-likely fair value is $233.74 a share — about 12.7% away from today's price of $207.38, so the stock currently looks fairly priced.
Is it drowning in debt?
Healthy
Net cash $1.6B - more cash than debt. Interest coverage -33.4x.
Net debt
$-1.61B
Interest coverage
-33.39x
Zscaler, Inc.'s profit covers its interest bill about 0.0 times over. which is weaker than most peers shown here and 3 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
ZS
BASELINE
Zscaler, Inc.
Total debt $1.87B Interest coverage -33.39x This is the baseline the peer rows are being compared against.
Total debt $820.18M Interest coverage -10.47x Neither company has much profit cushion over interest right now.
Total debt $561.40M Interest coverage 103.72x This peer still has a real interest-payment cushion, while ZS does not.
Total debt $2.76B Interest coverage -172.95x Neither company has much profit cushion over interest right now.
Total debt $1.28B Interest coverage -4.01x Neither company has much profit cushion over interest right now.
What you should know
The case for and against ZS
2 Rewards
1 Risk
Rewards
-
Revenue grew 25.4% last year.
-
Free cash flow was positive in 9/10 years.
Risks
-
Return on equity was -2.9% last year — the company lost money on shareholders' equity.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
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Forward P/E
36.88x
P/B
13.01x
P/S
10.09x
EV/EBITDA
734.51x
PEG ratio
2.12x
Profitability
How much profit each dollar creates
Gross margin
76.9%
Operating margin
-1.0%
Net margin
-1.9%
ROE
-2.9%
ROA
-1.0%
Health
Liquidity and balance-sheet strength
Debt / equity
0.72x
Current ratio
1.70x
Quick ratio
1.57x
Total debt
$1.87B
Total cash
$3.47B
Growth
How the business has been compounding
Revenue TTM
$3.35B
Revenue 5Y CAGR
32.4%
EPS TTM
-0.39
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$1.13B
Free CF TTM
$852.35M
FCF margin
25.4%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
—
Last ex-div date
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