215.185 USD
+5.56 (+2.65%)
ZS gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 278 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 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.
- ZS had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- ZS has a Return On Assets (-0.63%) which is in line with its industry peers.
- The Return On Equity of ZS (-2.07%) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.63% | ||
| ROE | -2.07% | ||
| 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
- ZS's Gross Margin of 76.65% is fine compared to the rest of the industry. ZS outperforms 70.86% 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 | 76.65% |
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.
- Compared to 1 year ago, ZS has more shares outstanding
- 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
- An Altman-Z score of 4.90 indicates that ZS is not in any danger for bankruptcy at the moment.
- ZS's Altman-Z score of 4.90 is fine compared to the rest of the industry. ZS outperforms 72.30% of its industry peers.
- The Debt to FCF ratio of ZS is 2.00, which is a good value as it means it would take ZS, 2.00 years of fcf income to pay off all of its debts.
- Looking at the Debt to FCF ratio, with a value of 2.00, ZS is in the better half of the industry, outperforming 67.63% of the companies in the same industry.
- A Debt/Equity ratio of 0.86 indicates that ZS is somewhat dependend on debt financing.
- With a Debt to Equity ratio value of 0.86, ZS is not doing good in the industry: 73.38% of the companies in the same industry are doing better.
- 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 | 0.86 | ||
| Debt/FCF | 2 | ||
| Altman-Z | 4.9 |
ROIC/WACCN/A
WACC10.87%
2.3 Liquidity
- A Current Ratio of 1.82 indicates that ZS should not have too much problems paying its short term obligations.
- ZS has a Current ratio of 1.82. This is comparable to the rest of the industry: ZS outperforms 54.68% of its industry peers.
- A Quick Ratio of 1.82 indicates that ZS should not have too much problems paying its short term obligations.
- Looking at the Quick ratio, with a value of 1.82, ZS is in line with its industry, outperforming 55.04% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.82 | ||
| Quick Ratio | 1.82 |
3. Growth
3.1 Past
- The Earnings Per Share has been growing slightly by 5.47% over the past year.
- ZS shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 68.71% yearly.
- The Revenue has grown by 23.24% in the past year. This is a very strong growth!
- The Revenue has been growing by 44.03% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)5.47%
EPS 3Y68.14%
EPS 5Y68.71%
EPS Q2Q%24.68%
Revenue 1Y (TTM)23.24%
Revenue growth 3Y34.82%
Revenue growth 5Y44.03%
Sales Q2Q%25.5%
3.2 Future
- ZS is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 19.81% yearly.
- Based on estimates for the next years, ZS will show a very strong growth in Revenue. The Revenue will grow by 20.01% on average per year.
EPS Next Y19.74%
EPS Next 2Y18.63%
EPS Next 3Y19.33%
EPS Next 5Y19.81%
Revenue Next Year23.95%
Revenue Next 2Y21.61%
Revenue Next 3Y20.67%
Revenue Next 5Y20.01%
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
- The Price/Earnings ratio is 62.01, which means the current valuation is very expensive for ZS.
- The rest of the industry has a similar Price/Earnings ratio as ZS.
- The average S&P500 Price/Earnings ratio is at 27.21. ZS is valued rather expensively when compared to this.
- The Price/Forward Earnings ratio is 46.62, which means the current valuation is very expensive for ZS.
- The rest of the industry has a similar Price/Forward Earnings ratio as ZS.
- When comparing the Price/Forward Earnings ratio of ZS to the average of the S&P500 Index (25.98), we can say ZS is valued expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 62.01 | ||
| Fwd PE | 46.62 |
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.
- Based on the Price/Free Cash Flow ratio, ZS is valued a bit cheaper than 62.23% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 40.46 | ||
| EV/EBITDA | 3357 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates ZS does not grow enough to justify the current Price/Earnings ratio.
- A more expensive valuation may be justified as ZS's earnings are expected to grow with 19.33% in the coming years.
PEG (NY)3.14
PEG (5Y)0.9
EPS Next 2Y18.63%
EPS Next 3Y19.33%
5. Dividend
5.1 Amount
- No dividends for ZS!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
ZSCALER INC / ZS FAQ
Can you provide the ChartMill fundamental rating for ZSCALER INC?
ChartMill assigns a fundamental rating of 4 / 10 to ZS.
Can you provide the valuation status for ZSCALER INC?
ChartMill assigns a valuation rating of 2 / 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 earnings growth outlook for ZSCALER INC?
The Earnings per Share (EPS) of ZSCALER INC (ZS) is expected to grow by 19.74% in the next year.