ZSNEUTRAL

Gross Margin

77.3%

Higher than 74% of Technology sector peers

Updated 22h ago

Sector Performance

74th percentile

77.3%

Sector Median

65.2%

Sector Avg

60.6%

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Deep Analysis

A gross margin of 77.3% means Zscaler keeps $0.773 of every dollar of revenue after paying the direct costs of delivering its services, leaving a wide cushion for operating expenses and profit.

This is well above the technology sector median of 65.2%, placing Zscaler in the 74th percentile among its sector peers. The year-over-year change is not available, but the quarter-over-quarter change shows a +0.9% increase from the prior quarter’s 76.6%. While the gross margin level is high, the near-flat trend offers no clear evidence of acceleration or deterioration. The combination of a strong margin and a slight uptick suggests limited near-term profitability risk, but no fresh catalyst to drive upside. This metric supports the overall NEUTRAL verdict — the impressive margin is a positive quality, but it does not alone shift the stock’s balanced risk/reward profile given other factors weighed in the neutral stance.

Frequently Asked Questions

What does the Gross Margin tell investors about ZS?

Gross margin reveals pricing power and cost structure. Software companies often sustain 70–80%; manufacturers typically 30–50%. Expansion is a bullish signal.

How is the Gross Margin calculated?

Gross Margin is calculated as: Gross Profit / Revenue.

How does ZS's Gross Margin compare to its sector?

ZS's Gross Margin of 77.3% compares to a Technology sector median of 65.2%, placing it in the 74th percentile.

Who are ZS's closest peers by Gross Margin?

The closest Technology peers by Gross Margin include: LYFT (47.6%), COHU (46.3%), UBER (45.0%), LSPD (44.4%), GRAB (43.4%).

The Formula

Gross Profit / Revenue

Why It Matters

Gross margin reveals pricing power and cost structure. Software companies often sustain 70–80%; manufacturers typically 30–50%. Expansion is a bullish signal.