ZSCALER INC (ZS) Stock Fundamental Analysis
USA - NASDAQ:ZS - US98980G1022 - Common Stock
275.01 USD
-4.72 (-1.69%)
276.05 USD
+1.04 (+0.38%)
ZS gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 281 industry peers in the Software industry. While ZS seems to be doing ok healthwise, there are quite some concerns on its profitability. ZS shows excellent growth, but is valued quite expensive already.
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.
ZS had negative earnings in each of the past 5 years.
ZS had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
ZS has a Return On Assets of -0.65%. This is comparable to the rest of the industry: ZS outperforms 55.52% of its industry peers.
With a Return On Equity value of -2.31%, ZS perfoms like the industry average, outperforming 56.23% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.65% | ||
| ROE | -2.31% | ||
| 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 76.87%, ZS is doing good in the industry, outperforming 72.60% of the companies in the same industry.
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 | 76.87% |
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. 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.
Compared to 5 years ago, ZS has more shares outstanding
The debt/assets ratio for ZS is higher compared to a year ago.
2.2 Solvency
ZS has an Altman-Z score of 6.30. This indicates that ZS is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of ZS (6.30) is better than 77.94% of its industry peers.
ZS has a debt to FCF ratio of 2.34. This is a good value and a sign of high solvency as ZS would need 2.34 years to pay back of all of its debts.
ZS's Debt to FCF ratio of 2.34 is fine compared to the rest of the industry. ZS outperforms 67.26% of its industry peers.
A Debt/Equity ratio of 0.95 indicates that ZS is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.95, ZS is doing worse than 73.31% 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 | 0.95 | ||
| Debt/FCF | 2.34 | ||
| Altman-Z | 6.3 |
ROIC/WACCN/A
WACC10.84%
2.3 Liquidity
A Current Ratio of 2.01 indicates that ZS has no problem at all paying its short term obligations.
ZS's Current ratio of 2.01 is fine compared to the rest of the industry. ZS outperforms 60.14% of its industry peers.
A Quick Ratio of 2.01 indicates that ZS has no problem at all paying its short term obligations.
The Quick ratio of ZS (2.01) is better than 60.85% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.01 | ||
| Quick Ratio | 2.01 |
3. Growth
3.1 Past
ZS shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 2.82%.
The Earnings Per Share has been growing by 68.71% on average over the past years. This is a very strong growth
Looking at the last year, ZS shows a very strong growth in Revenue. The Revenue has grown by 23.31%.
ZS shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 44.03% yearly.
EPS 1Y (TTM)2.82%
EPS 3Y68.14%
EPS 5Y68.71%
EPS Q2Q%1.14%
Revenue 1Y (TTM)23.31%
Revenue growth 3Y34.82%
Revenue growth 5Y44.03%
Sales Q2Q%21.31%
3.2 Future
Based on estimates for the next years, ZS will show a very strong growth in Earnings Per Share. The EPS will grow by 21.82% on average per year.
ZS is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 19.88% yearly.
EPS Next Y15.58%
EPS Next 2Y17.95%
EPS Next 3Y19.75%
EPS Next 5Y21.82%
Revenue Next Year23.29%
Revenue Next 2Y21.27%
Revenue Next 3Y20.75%
Revenue Next 5Y19.88%
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.
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
With a Price/Earnings ratio of 83.84, ZS can be considered very expensive at the moment.
ZS's Price/Earnings ratio is in line with the industry average.
The average S&P500 Price/Earnings ratio is at 25.45. ZS is valued rather expensively when compared to this.
ZS is valuated quite expensively with a Price/Forward Earnings ratio of 72.55.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ZS is on the same level as its industry peers.
The average S&P500 Price/Forward Earnings ratio is at 34.46. ZS is valued rather expensively when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 83.84 | ||
| Fwd PE | 72.55 |
4.2 Price Multiples
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ZS is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 59.91 | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
A more expensive valuation may be justified as ZS's earnings are expected to grow with 19.75% in the coming years.
PEG (NY)5.38
PEG (5Y)1.22
EPS Next 2Y17.95%
EPS Next 3Y19.75%
5. Dividend
5.1 Amount
No dividends for ZS!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
275.01
-4.72 (-1.69%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners56.62%
Inst Owner Change63.64%
Ins Owners35.96%
Ins Owner Change5.71%
Market Cap43.53B
Revenue(TTM)2.67B
Net Income(TTM)-41.48M
Analysts80.71
Price Target331.67 (20.6%)
Short Float %5.87%
Short Ratio4.42
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)8.32%
Min EPS beat(2)8.25%
Max EPS beat(2)8.39%
EPS beat(4)4
Avg EPS beat(4)11.04%
Min EPS beat(4)8.25%
Max EPS beat(4)18.11%
EPS beat(8)8
Avg EPS beat(8)19.74%
EPS beat(12)12
Avg EPS beat(12)18.67%
EPS beat(16)16
Avg EPS beat(16)20.39%
Revenue beat(2)0
Avg Revenue beat(2)-1.22%
Min Revenue beat(2)-1.22%
Max Revenue beat(2)-1.21%
Revenue beat(4)1
Avg Revenue beat(4)-0.72%
Min Revenue beat(4)-1.22%
Max Revenue beat(4)0.57%
Revenue beat(8)5
Avg Revenue beat(8)0.13%
Revenue beat(12)8
Avg Revenue beat(12)0.42%
Revenue beat(16)12
Avg Revenue beat(16)1.18%
PT rev (1m)-0.17%
PT rev (3m)2.68%
EPS NQ rev (1m)0.06%
EPS NQ rev (3m)2.31%
EPS NY rev (1m)0.01%
EPS NY rev (3m)0.48%
Revenue NQ rev (1m)0.02%
Revenue NQ rev (3m)3.04%
Revenue NY rev (1m)0%
Revenue NY rev (3m)2.33%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 83.84 | ||
| Fwd PE | 72.55 | ||
| P/S | 16.29 | ||
| P/FCF | 59.91 | ||
| P/OCF | 44.77 | ||
| P/B | 24.2 | ||
| P/tB | 32.63 | ||
| EV/EBITDA | N/A |
EPS(TTM)3.28
EY1.19%
EPS(NY)3.79
Fwd EY1.38%
FCF(TTM)4.59
FCFY1.67%
OCF(TTM)6.14
OCFY2.23%
SpS16.89
BVpS11.37
TBVpS8.43
PEG (NY)5.38
PEG (5Y)1.22
Graham Number28.96
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.65% | ||
| ROE | -2.31% | ||
| ROCE | N/A | ||
| ROIC | N/A | ||
| ROICexc | N/A | ||
| ROICexgc | N/A | ||
| OM | N/A | ||
| PM (TTM) | N/A | ||
| GM | 76.87% | ||
| FCFM | 27.19% |
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-Score4
Asset Turnover0.42
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.95 | ||
| Debt/FCF | 2.34 | ||
| Debt/EBITDA | N/A | ||
| Cap/Depr | 202.8% | ||
| Cap/Sales | 9.19% | ||
| Interest Coverage | N/A | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 2.01 | ||
| Quick Ratio | 2.01 | ||
| Altman-Z | 6.3 |
F-Score4
WACC10.84%
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)2.82%
EPS 3Y68.14%
EPS 5Y68.71%
EPS Q2Q%1.14%
EPS Next Y15.58%
EPS Next 2Y17.95%
EPS Next 3Y19.75%
EPS Next 5Y21.82%
Revenue 1Y (TTM)23.31%
Revenue growth 3Y34.82%
Revenue growth 5Y44.03%
Sales Q2Q%21.31%
Revenue Next Year23.29%
Revenue Next 2Y21.27%
Revenue Next 3Y20.75%
Revenue Next 5Y19.88%
EBIT growth 1Y-0.61%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year55.15%
EBIT Next 3Y33.84%
EBIT Next 5YN/A
FCF growth 1Y24.23%
FCF growth 3Y46.46%
FCF growth 5Y92.49%
OCF growth 1Y24.7%
OCF growth 3Y44.56%
OCF growth 5Y65.09%
ZSCALER INC / ZS FAQ
Can you provide the ChartMill fundamental rating for ZSCALER INC?
ChartMill assigns a fundamental rating of 4 / 10 to ZS.
What is the valuation status for ZS stock?
ChartMill assigns a valuation rating of 1 / 10 to ZSCALER INC (ZS). This can be considered as Overvalued.
How profitable is ZSCALER INC (ZS) stock?
ZSCALER INC (ZS) has a profitability rating of 3 / 10.
What is the valuation of ZSCALER INC based on its PE and PB ratios?
The Price/Earnings (PE) ratio for ZSCALER INC (ZS) is 83.84 and the Price/Book (PB) ratio is 24.2.
How financially healthy is ZSCALER INC?
The financial health rating of ZSCALER INC (ZS) is 6 / 10.