ZSCALER INC (ZS) Stock Fundamental Analysis
NASDAQ:ZS - Nasdaq - US98980G1022 - Common Stock - Currency: USD
Taking everything into account, ZS scores 5 out of 10 in our fundamental rating. ZS was compared to 283 industry peers in the Software industry. ZS scores quite bad on profitability, while its financial health is fine. Not spectacular, but in line with the averages. ZS shows excellent growth, but is valued quite expensive already.
1. Profitability
1.1 Basic Checks
In the past year ZS was profitable.
ZS had a positive operating cash flow in the past year.
In the past 5 years ZS always reported negative net income.
ZS had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of ZS (-0.77%) is comparable to the rest of the industry.
ZS has a Return On Equity of -2.54%. This is comparable to the rest of the industry: ZS outperforms 58.91% 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
Looking at the Gross Margin, with a value of 77.94%, ZS is in the better half of the industry, outperforming 74.55% of the companies in the same industry.
ZS's Gross Margin has been stable in the last couple of years.
ZS does not have Profit Margin and Operating Margin available, so we won't be analyzing them here.
| 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.
ZS has more shares outstanding than it did 1 year ago.
ZS has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, ZS has an improved debt to assets ratio.
2.2 Solvency
ZS has an Altman-Z score of 5.69. This indicates that ZS is financially healthy and has little risk of bankruptcy at the moment.
ZS has a Altman-Z score of 5.69. This is in the better half of the industry: ZS outperforms 70.55% 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.
ZS has a better Debt to FCF ratio (1.76) than 66.55% of its industry peers.
ZS has a Debt/Equity ratio of 0.80. This is a neutral value indicating ZS is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.80, ZS is doing worse than 73.45% of the companies in the same industry.
Even though the debt/equity ratio score it not favorable for ZS, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.8 | ||
| Debt/FCF | 1.76 | ||
| Altman-Z | 5.69 |
ROIC/WACCN/A
WACC13.7%
2.3 Liquidity
A Current Ratio of 1.15 indicates that ZS should not have too much problems paying its short term obligations.
ZS has a Current ratio of 1.15. This is in the lower half of the industry: ZS underperforms 69.82% of its industry peers.
A Quick Ratio of 1.15 indicates that ZS should not have too much problems paying its short term obligations.
ZS has a Quick ratio of 1.15. This is in the lower half of the industry: ZS underperforms 69.45% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.15 | ||
| Quick Ratio | 1.15 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 52.31% over the past year.
Measured over the past years, ZS shows a very strong growth in Earnings Per Share. The EPS has been growing by 70.72% on average per year.
Looking at the last year, ZS shows a very strong growth in Revenue. The Revenue has grown by 30.77%.
ZS shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 48.24% yearly.
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%26.42%
3.2 Future
The Earnings Per Share is expected to grow by 19.16% on average over the next years. This is quite good.
The Revenue is expected to grow by 21.88% on average over the next years. This is a very strong growth
EPS Next Y-3.24%
EPS Next 2Y7.51%
EPS Next 3Y12.02%
EPS Next 5Y19.16%
Revenue Next Year23.15%
Revenue Next 2Y21.87%
Revenue Next 3Y21.64%
Revenue Next 5Y21.88%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
4. Valuation
4.1 Price/Earnings Ratio
ZS is valuated quite expensively with a Price/Earnings ratio of 60.03.
Compared to the rest of the industry, the Price/Earnings ratio of ZS is on the same level as its industry peers.
Compared to an average S&P500 Price/Earnings ratio of 29.98, ZS is valued quite expensively.
The Price/Forward Earnings ratio is 53.56, 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 22.66, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 60.03 | ||
| Fwd PE | 53.56 |
4.2 Price Multiples
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ZS indicates a somewhat cheap valuation: ZS is cheaper than 62.18% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 46.47 | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
ZS's earnings are expected to grow with 12.02% in the coming years. This may justify a more expensive valuation.
PEG (NY)N/A
PEG (5Y)0.85
EPS Next 2Y7.51%
EPS Next 3Y12.02%
5. Dividend
5.1 Amount
No dividends for ZS!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
NASDAQ:ZS (3/3/2025, 12:08:03 PM)
197.5
+1.27 (+0.65%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners54.13%
Inst Owner Change3.6%
Ins Owners37.29%
Ins Owner Change1.58%
Market Cap30.30B
Analysts78.11
Price Target233.17 (18.06%)
Short Float %5.65%
Short Ratio3.06
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/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)-0.35%
PT rev (3m)4.22%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0.2%
EPS NY rev (1m)-0.02%
EPS NY rev (3m)3.42%
Revenue NQ rev (1m)0.08%
Revenue NQ rev (3m)0.27%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.93%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 60.03 | ||
| Fwd PE | 53.56 | ||
| P/S | 13.18 | ||
| P/FCF | 46.47 | ||
| P/OCF | 35.64 | ||
| P/B | 21.21 | ||
| P/tB | 31.84 | ||
| EV/EBITDA | N/A |
EPS(TTM)3.29
EY1.67%
EPS(NY)3.69
Fwd EY1.87%
FCF(TTM)4.25
FCFY2.15%
OCF(TTM)5.54
OCFY2.81%
SpS14.98
BVpS9.31
TBVpS6.2
PEG (NY)N/A
PEG (5Y)0.85
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 | 5.69 |
F-Score6
WACC13.7%
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-3.24%
EPS Next 2Y7.51%
EPS Next 3Y12.02%
EPS Next 5Y19.16%
Revenue 1Y (TTM)30.77%
Revenue growth 3Y47.68%
Revenue growth 5Y48.24%
Sales Q2Q%26.42%
Revenue Next Year23.15%
Revenue Next 2Y21.87%
Revenue Next 3Y21.64%
Revenue Next 5Y21.88%
EBIT growth 1Y47.99%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year61.61%
EBIT Next 3Y36.14%
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%