Zscaler, Inc.ZS
NASDAQ • Technology
$146.09
P/E
—
PEG
1.64
FCF Yield
3.1%
Rev Growth YoY
+25.9% YoY
Gross Margin
76.6%
Health Score
7/10
D/E Ratio
1.00
Confidence
MEDIUM
Business Snapshot
Zscaler is a cloud-native cybersecurity company operating in the Software-Infrastructure sub-industry, offering secure internet access and web gateway services through its Zero Trust Exchange platform. It competes in the fast-growing secure access service edge (SASE) market as a recognised leader alongside Palo Alto Networks and Netskope. With a market capitalisation of $23.50 billion, Zscaler is a large-cap stock generating $3.00 billion in trailing twelve-month revenue, placing it at a significant but not dominant scale relative to legacy security vendors. The company remains unprofitable on a GAAP net income basis (TTM net income of -$67.63 million), but its business model is characterised by strong free cash flow generation — a hallmark of high-scalability cloud subscriptions with upfront collections.
Financial Health
Gross margin of 76.6% is stable year-over-year, while net margin of -2.2% reflects persistent net losses even as revenue scales. Debt-to-equity of 1.0x is moderate and manageable, and a current ratio of 2.01x indicates ample short-term liquidity coverage...
Risk Assessment
- PROFITABILITY — Net margin of -2.2% and TTM net income of -$67.63 million mean the company is still unprofitable on a GAAP basis, limiting valuation support from earnings.
- VALUATION DIVERGENCE — The two DCF estimates ($109.38 vs $218.82) differ by more than 50%, creating significant uncertainty about intrinsic value; any fair value conclusion depends heavily on the model chosen.
- TECHNICALS — Price of $146.09 is 36% below the 200-day moving average of $228.80, confirming a long-term downtrend, and a death cross (50-day crossing below 200-day) has already occurred.
- 52-WEEK POSITION — Current price of $146.09 is well below the midpoint of the 52-week range ($226.25) and 57% below the high of $336.99, reflecting severe downward pressure and a loss of investor confidence.
- EARNINGS QUALITY — Despite four consecutive earnings beats, earnings growth of -344.2% highlights that revenue scale is not yet translating to improving net income year-over-year....