ZSCALER INC (ZS)
US98980G1022 - Common Stock
ZS gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 280 industry peers in the Software industry. While ZS seems to be doing ok healthwise, there are quite some concerns on its profitability. ZS is valued quite expensively, but it does show have an excellent growth rating.
1. Profitability
1.1 Basic Checks
ZS had positive earnings in the past year.
In the past year ZS had a positive cash flow from operations.
In the past 5 years ZS always reported negative net income.
Each year in the past 5 years ZS had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of -0.77%, ZS is in line with its industry, outperforming 59.14% of the companies in the same industry.
ZS has a Return On Equity of -2.54%. This is comparable to the rest of the industry: ZS outperforms 59.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.77% | ||
| ROE | -2.54% | ||
| ROIC | N/A |
ROA(3y)-6.87%
ROA(5y)-7.7%
ROE(3y)-33.5%
ROE(5y)-34.76%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
ZS has a Gross Margin of 77.94%. This is in the better half of the industry: ZS outperforms 74.55% of its industry peers.
ZS's Gross Margin has been stable in the last couple of years.
The Profit Margin and Operating Margin are not available for ZS so they could not be analyzed.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | N/A | ||
| PM (TTM) | N/A | ||
| GM | 77.94% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y0.14%
GM growth 5Y-0.59%
2. Health
2.1 Basic Checks
ZS does not have a ROIC to compare to the WACC, probably because it is not profitable.
The number of shares outstanding for ZS has been increased compared to 1 year ago.
ZS has more shares outstanding than it did 5 years ago.
The debt/assets ratio for ZS has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 5.43 indicates that ZS is not in any danger for bankruptcy at the moment.
ZS has a Altman-Z score of 5.43. This is in the better half of the industry: ZS outperforms 64.52% of its industry peers.
ZS has a debt to FCF ratio of 1.76. This is a very positive value and a sign of high solvency as it would only need 1.76 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 1.76, ZS is doing good in the industry, outperforming 68.82% of the companies in the same industry.
ZS has a Debt/Equity ratio of 0.80. This is a neutral value indicating ZS is somewhat dependend on debt financing.
The Debt to Equity ratio of ZS (0.80) is worse than 73.48% of its industry peers.
Although ZS does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.8 | ||
| Debt/FCF | 1.76 | ||
| Altman-Z | 5.43 |
ROIC/WACCN/A
WACC11.68%
2.3 Liquidity
ZS has a Current Ratio of 1.15. This is a normal value and indicates that ZS is financially healthy and should not expect problems in meeting its short term obligations.
ZS has a Current ratio of 1.15. This is in the lower half of the industry: ZS underperforms 69.18% of its industry peers.
A Quick Ratio of 1.15 indicates that ZS should not have too much problems paying its short term obligations.
The Quick ratio of ZS (1.15) is worse than 68.82% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.15 | ||
| Quick Ratio | 1.15 |
3. Growth
3.1 Past
ZS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 52.31%, which is quite impressive.
ZS shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 70.72% yearly.
ZS shows a strong growth in Revenue. In the last year, the Revenue has grown by 30.77%.
Measured over the past years, ZS shows a very strong growth in Revenue. The Revenue has been growing by 48.24% on average per year.
EPS 1Y (TTM)52.31%
EPS 3Y81.9%
EPS 5Y70.72%
EPS Q2Q%14.93%
Revenue 1Y (TTM)30.77%
Revenue growth 3Y47.68%
Revenue growth 5Y48.24%
Sales Q2Q%26.43%
3.2 Future
The Earnings Per Share is expected to grow by 19.16% on average over the next years. This is quite good.
ZS is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 21.31% yearly.
EPS Next Y-2.8%
EPS Next 2Y7.96%
EPS Next 3Y12.01%
EPS Next 5Y19.16%
Revenue Next Year23.11%
Revenue Next 2Y21.83%
Revenue Next 3Y21.65%
Revenue Next 5Y21.31%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
4. Valuation
4.1 Price/Earnings Ratio
ZS is valuated quite expensively with a Price/Earnings ratio of 56.92.
Compared to the rest of the industry, the Price/Earnings ratio of ZS is on the same level as its industry peers.
When comparing the Price/Earnings ratio of ZS to the average of the S&P500 Index (27.54), we can say ZS is valued expensively.
The Price/Forward Earnings ratio is 50.37, which means the current valuation is very expensive for ZS.
ZS's Price/Forward Earnings is on the same level as the industry average.
ZS is valuated expensively when we compare the Price/Forward Earnings ratio to 23.99, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 56.92 | ||
| Fwd PE | 50.37 |
4.2 Price Multiples
Based on the Price/Free Cash Flow ratio, ZS is valued a bit cheaper than 67.74% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 44.06 | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
A more expensive valuation may be justified as ZS's earnings are expected to grow with 12.01% in the coming years.
PEG (NY)N/A
PEG (5Y)0.8
EPS Next 2Y7.96%
EPS Next 3Y12.01%
5. Dividend
5.1 Amount
No dividends for ZS!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
ZSCALER INC
NASDAQ:ZS (12/24/2024, 7:47:27 PM)
After market: 187.01 -0.25 (-0.13%)187.26
+1.32 (+0.71%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners50.14%
Inst Owner Change5.62%
Ins Owners37.48%
Ins Owner Change1.28%
Market Cap28.73B
Analysts79.25
Price Target227.14 (21.3%)
Short Float %4.15%
Short Ratio2.19
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)20.54%
Min EPS beat(2)18.11%
Max EPS beat(2)22.98%
EPS beat(4)4
Avg EPS beat(4)24.68%
Min EPS beat(4)18.11%
Max EPS beat(4)30.36%
EPS beat(8)8
Avg EPS beat(8)23.83%
EPS beat(12)12
Avg EPS beat(12)23.9%
EPS beat(16)16
Avg EPS beat(16)29.98%
Revenue beat(2)2
Avg Revenue beat(2)0.96%
Min Revenue beat(2)0.57%
Max Revenue beat(2)1.35%
Revenue beat(4)4
Avg Revenue beat(4)0.66%
Min Revenue beat(4)0.22%
Max Revenue beat(4)1.35%
Revenue beat(8)7
Avg Revenue beat(8)1.02%
Revenue beat(12)11
Avg Revenue beat(12)1.24%
Revenue beat(16)15
Avg Revenue beat(16)2.05%
PT rev (1m)2.12%
PT rev (3m)-5.24%
EPS NQ rev (1m)-12.31%
EPS NQ rev (3m)-12.31%
EPS NY rev (1m)4.01%
EPS NY rev (3m)1.46%
Revenue NQ rev (1m)-0.88%
Revenue NQ rev (3m)-0.88%
Revenue NY rev (1m)0.93%
Revenue NY rev (3m)0.74%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 56.92 | ||
| Fwd PE | 50.37 | ||
| P/S | 12.5 | ||
| P/FCF | 44.06 | ||
| P/OCF | 33.79 | ||
| P/B | 20.11 | ||
| P/tB | 30.18 | ||
| EV/EBITDA | N/A |
EPS(TTM)3.29
EY1.76%
EPS(NY)3.72
Fwd EY1.99%
FCF(TTM)4.25
FCFY2.27%
OCF(TTM)5.54
OCFY2.96%
SpS14.98
BVpS9.31
TBVpS6.2
PEG (NY)N/A
PEG (5Y)0.8
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.77% | ||
| ROE | -2.54% | ||
| ROCE | N/A | ||
| ROIC | N/A | ||
| ROICexc | N/A | ||
| ROICexgc | N/A | ||
| OM | N/A | ||
| PM (TTM) | N/A | ||
| GM | 77.94% | ||
| FCFM | 28.36% |
ROA(3y)-6.87%
ROA(5y)-7.7%
ROE(3y)-33.5%
ROE(5y)-34.76%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y0.14%
GM growth 5Y-0.59%
F-Score6
Asset Turnover0.49
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.8 | ||
| Debt/FCF | 1.76 | ||
| Debt/EBITDA | N/A | ||
| Cap/Depr | 221.28% | ||
| Cap/Sales | 8.62% | ||
| Interest Coverage | N/A | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.15 | ||
| Quick Ratio | 1.15 | ||
| Altman-Z | 5.43 |
F-Score6
WACC11.68%
ROIC/WACCN/A
Cap/Depr(3y)205.41%
Cap/Depr(5y)204.29%
Cap/Sales(3y)8.42%
Cap/Sales(5y)9.19%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)52.31%
EPS 3Y81.9%
EPS 5Y70.72%
EPS Q2Q%14.93%
EPS Next Y-2.8%
EPS Next 2Y7.96%
EPS Next 3Y12.01%
EPS Next 5Y19.16%
Revenue 1Y (TTM)30.77%
Revenue growth 3Y47.68%
Revenue growth 5Y48.24%
Sales Q2Q%26.43%
Revenue Next Year23.11%
Revenue Next 2Y21.83%
Revenue Next 3Y21.65%
Revenue Next 5Y21.31%
EBIT growth 1Y47.99%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year57.89%
EBIT Next 3Y36.79%
EBIT Next 5YN/A
FCF growth 1Y167.72%
FCF growth 3Y59.67%
FCF growth 5Y83.91%
OCF growth 1Y138.14%
OCF growth 3Y56.87%
OCF growth 5Y68.16%