ZSCALER INC (ZS) Fundamental Analysis & Valuation
NASDAQ:ZS • US98980G1022
Current stock price
142.13 USD
+2.61 (+1.87%)
At close:
139.678 USD
-2.45 (-1.73%)
After Hours:
This ZS fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.
1. ZS Profitability Analysis
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.
- ZS had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- The Return On Assets of ZS (-1.00%) is comparable to the rest of the industry.
- ZS's Return On Equity of -3.08% is in line compared to the rest of the industry. ZS outperforms 55.64% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -1% | ||
| ROE | -3.08% | ||
| ROIC | N/A |
ROA(3y)-2.49%
ROA(5y)-6.57%
ROE(3y)-11.58%
ROE(5y)-30.47%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
- With a decent Gross Margin value of 76.56%, ZS is doing good in the industry, outperforming 70.55% 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 | 76.56% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-0.4%
GM growth 5Y-0.23%
2. ZS Health Analysis
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 a worse debt to assets ratio.
2.2 Solvency
- ZS has an Altman-Z score of 3.45. This indicates that ZS is financially healthy and has little risk of bankruptcy at the moment.
- ZS has a better Altman-Z score (3.45) than 69.09% of its industry peers.
- The Debt to FCF ratio of ZS is 1.95, which is an excellent value as it means it would take ZS, only 1.95 years of fcf income to pay off all of its debts.
- ZS's Debt to FCF ratio of 1.95 is fine compared to the rest of the industry. ZS outperforms 66.55% of its industry peers.
- ZS has a Debt/Equity ratio of 0.78. This is a neutral value indicating ZS is somewhat dependend on debt financing.
- ZS's Debt to Equity ratio of 0.78 is on the low side compared to the rest of the industry. ZS is outperformed by 70.55% of its industry peers.
- Although ZS's pure debt/equity ratio does not look good, it has limited outstanding debt compared to the Free Cash Flow. 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 | 0.78 | ||
| Debt/FCF | 1.95 | ||
| Altman-Z | 3.45 |
ROIC/WACCN/A
WACC10.62%
2.3 Liquidity
- ZS has a Current Ratio of 1.90. This is a normal value and indicates that ZS is financially healthy and should not expect problems in meeting its short term obligations.
- With a Current ratio value of 1.90, ZS perfoms like the industry average, outperforming 56.00% of the companies in the same industry.
- ZS has a Quick Ratio of 1.90. 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 Quick ratio (1.90) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.9 | ||
| Quick Ratio | 1.9 |
3. ZS Growth Analysis
3.1 Past
- ZS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 11.78%, which is quite good.
- The Earnings Per Share has been growing by 68.71% on average over the past years. This is a very strong growth
- ZS shows a strong growth in Revenue. In the last year, the Revenue has grown by 23.91%.
- Measured over the past years, ZS shows a very strong growth in Revenue. The Revenue has been growing by 44.03% on average per year.
EPS 1Y (TTM)11.78%
EPS 3Y68.14%
EPS 5Y68.71%
EPS Q2Q%29.49%
Revenue 1Y (TTM)23.91%
Revenue growth 3Y34.82%
Revenue growth 5Y44.03%
Sales Q2Q%25.91%
3.2 Future
- Based on estimates for the next years, ZS will show a quite strong growth in Earnings Per Share. The EPS will grow by 18.16% on average per year.
- ZS is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 20.09% yearly.
EPS Next Y24.09%
EPS Next 2Y19.66%
EPS Next 3Y20.03%
EPS Next 5Y18.16%
Revenue Next Year24.75%
Revenue Next 2Y22.21%
Revenue Next 3Y20.96%
Revenue Next 5Y20.09%
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.
- The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
4. ZS Valuation Analysis
4.1 Price/Earnings Ratio
- ZS is valuated quite expensively with a Price/Earnings ratio of 38.41.
- ZS's Price/Earnings is on the same level as the industry average.
- The average S&P500 Price/Earnings ratio is at 26.21. ZS is valued slightly more expensive when compared to this.
- The Price/Forward Earnings ratio is 30.27, which means the current valuation is very expensive for ZS.
- The rest of the industry has a similar Price/Forward Earnings ratio as ZS.
- ZS is valuated rather expensively when we compare the Price/Forward Earnings ratio to 23.13, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.41 | ||
| Fwd PE | 30.27 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ZS is on the same level as its industry peers.
- 64.73% of the companies in the same industry are more expensive than ZS, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 26.15 | ||
| EV/EBITDA | 948.05 |
4.3 Compensation for Growth
- The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
- A more expensive valuation may be justified as ZS's earnings are expected to grow with 20.03% in the coming years.
PEG (NY)1.59
PEG (5Y)0.56
EPS Next 2Y19.66%
EPS Next 3Y20.03%
5. ZS Dividend Analysis
5.1 Amount
- No dividends for ZS!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
ZS Fundamentals: All Metrics, Ratios and Statistics
142.13
+2.61 (+1.87%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)02-26 2026-02-26/amc
Earnings (Next)05-27 2026-05-27/amc
Inst Owners57.65%
Inst Owner Change0%
Ins Owners35.14%
Ins Owner Change-0.36%
Market Cap22.85B
Revenue(TTM)3.00B
Net Income(TTM)-67.63M
Analysts82.41
Price Target238.81 (68.02%)
Short Float %7.52%
Short Ratio2.68
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
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)8.86%
Min EPS beat(2)8.4%
Max EPS beat(2)9.33%
EPS beat(4)4
Avg EPS beat(4)8.59%
Min EPS beat(4)8.25%
Max EPS beat(4)9.33%
EPS beat(8)8
Avg EPS beat(8)14.4%
EPS beat(12)12
Avg EPS beat(12)17.68%
EPS beat(16)16
Avg EPS beat(16)19.81%
Revenue beat(2)0
Avg Revenue beat(2)-0.98%
Min Revenue beat(2)-1.11%
Max Revenue beat(2)-0.85%
Revenue beat(4)0
Avg Revenue beat(4)-1.1%
Min Revenue beat(4)-1.22%
Max Revenue beat(4)-0.85%
Revenue beat(8)3
Avg Revenue beat(8)-0.41%
Revenue beat(12)6
Avg Revenue beat(12)-0.04%
Revenue beat(16)10
Avg Revenue beat(16)0.42%
PT rev (1m)-22.3%
PT rev (3m)-28.49%
EPS NQ rev (1m)1.71%
EPS NQ rev (3m)6.66%
EPS NY rev (1m)0%
EPS NY rev (3m)3.63%
Revenue NQ rev (1m)0.12%
Revenue NQ rev (3m)0.43%
Revenue NY rev (1m)0.18%
Revenue NY rev (3m)0.65%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.41 | ||
| Fwd PE | 30.27 | ||
| P/S | 7.61 | ||
| P/FCF | 26.15 | ||
| P/OCF | 20.51 | ||
| P/B | 10.41 | ||
| P/tB | 22.83 | ||
| EV/EBITDA | 948.05 |
EPS(TTM)3.7
EY2.6%
EPS(NY)4.7
Fwd EY3.3%
FCF(TTM)5.43
FCFY3.82%
OCF(TTM)6.93
OCFY4.87%
SpS18.66
BVpS13.66
TBVpS6.23
PEG (NY)1.59
PEG (5Y)0.56
Graham Number33.72
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -1% | ||
| ROE | -3.08% | ||
| ROCE | N/A | ||
| ROIC | N/A | ||
| ROICexc | N/A | ||
| ROICexgc | N/A | ||
| OM | N/A | ||
| PM (TTM) | N/A | ||
| GM | 76.56% | ||
| FCFM | 29.12% |
ROA(3y)-2.49%
ROA(5y)-6.57%
ROE(3y)-11.58%
ROE(5y)-30.47%
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
ROICexgc growth 3YN/A
ROICexgc 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 3Y-0.4%
GM growth 5Y-0.23%
F-Score3
Asset Turnover0.44
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.78 | ||
| Debt/FCF | 1.95 | ||
| Debt/EBITDA | 88.15 | ||
| Cap/Depr | 155.86% | ||
| Cap/Sales | 8% | ||
| Interest Coverage | N/A | ||
| Cash Conversion | 5767.14% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.9 | ||
| Quick Ratio | 1.9 | ||
| Altman-Z | 3.45 |
F-Score3
WACC10.62%
ROIC/WACCN/A
Cap/Depr(3y)212%
Cap/Depr(5y)195.75%
Cap/Sales(3y)8.71%
Cap/Sales(5y)8.62%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)11.78%
EPS 3Y68.14%
EPS 5Y68.71%
EPS Q2Q%29.49%
EPS Next Y24.09%
EPS Next 2Y19.66%
EPS Next 3Y20.03%
EPS Next 5Y18.16%
Revenue 1Y (TTM)23.91%
Revenue growth 3Y34.82%
Revenue growth 5Y44.03%
Sales Q2Q%25.91%
Revenue Next Year24.75%
Revenue Next 2Y22.21%
Revenue Next 3Y20.96%
Revenue Next 5Y20.09%
EBIT growth 1Y-33.78%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year57.96%
EBIT Next 3Y33.61%
EBIT Next 5Y27.39%
FCF growth 1Y74.52%
FCF growth 3Y46.46%
FCF growth 5Y92.49%
OCF growth 1Y72.11%
OCF growth 3Y44.56%
OCF growth 5Y65.09%
ZSCALER INC / ZS Fundamental Analysis FAQ
Can you provide the ChartMill fundamental rating for ZSCALER INC?
ChartMill assigns a fundamental rating of 5 / 10 to ZS.
Can you provide the valuation status for ZSCALER INC?
ChartMill assigns a valuation rating of 3 / 10 to ZSCALER INC (ZS). This can be considered as Overvalued.
Can you provide the profitability details for ZSCALER INC?
ZSCALER INC (ZS) has a profitability rating of 3 / 10.
Can you provide the PE and PB ratios for ZS stock?
The Price/Earnings (PE) ratio for ZSCALER INC (ZS) is 38.41 and the Price/Book (PB) ratio is 10.41.
Can you provide the financial health for ZS stock?
The financial health rating of ZSCALER INC (ZS) is 5 / 10.