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Zscaler Inc ZS

Morningstar Rating
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Stock XNAS Rating as of
$169.96 +13.31 (8.50%)
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As of Delayed Price Post-Trading: $170.44 +0.47
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Company Report

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Zscaler Earnings: Impressive Traction in Emerging Products Drives Sales Growth for the Quarter

Malik Ahmed Khan

We maintain our $213 per share fair value estimate for narrow-moat Zscaler after the firm reported fiscal third-quarter earnings with sales and profitability exceeding the firm’s prior guidance. Along with strong execution in its core business, we were encouraged to see a fourth of Zscaler’s new and upselling business coming from its emerging products category. The strong growth in emerging products, coupled with management’s commentary on customer spending, lends further credence to our existing thesis that Zscaler stands to benefit from increased vendor consolidation as customers seek to simplify their cybersecurity outlay.

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Price vs Fair Value

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ZS is trading within a range we consider fairly valued.
Price
$156.65
Fair Value
$829.00
Uncertainty
High
1-Star Price
$246.69
5-Star Price
$375.60
Economic Moat
Pfyygh
Capital Allocation
Gyhfmhzl

Bulls Say, Bears Say

Bulls

Zscaler has strong secular tailwinds behind its back as the convergence of networking and the security market is in its early innings.

Bears

Large public cloud vendors often offer their own cybersecurity solutions, which could hamper Zscaler’s growth opportunities.

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News

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Trading Information

Previous Close Price
$156.65
Day Range
$163.44–183.70
52-Week Range
$128.12–259.61
Bid/Ask
$170.15 / $170.49
Market Cap
$25.47 Bil
Volume/Avg
10.1 Mil / 2.2 Mil

Key Statistics

Price/Earnings (Normalized)
64.46
Price/Sales
12.75
Dividend Yield (Trailing)
—
Dividend Yield (Forward)
—
Total Yield
—

Company Profile

Zscaler is a software-as-a-service, or SaaS, firm focusing on providing cloud-native cybersecurity solutions to primarily enterprise customers. Zscaler’s offerings can be broadly partitioned into Zscaler Internet Access, which provides secure access to external applications, and Zscaler Private Access, which provides secure access to internal applications. The firm is headquartered in San Jose, California, and went public in 2018.
Sector
Technology
Industry
Software - Infrastructure
Stock Style Box
Mid Growth
Total Number of Employees
5,962
Website
https://www.zscaler.com

Competitors

Valuation

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Metric
ZS
PANW
CSCO
Price/Earnings (Normalized)
 64.4652.3511.52
Price/Book Value
 25.6721.224.06
Price/Sales
 12.7513.333.39
Price/Cash Flow
 42.0143.2511.47
Price/Earnings
ZS
PANW
CSCO

Financial Strength

Metric
ZS
PANW
CSCO
Quick Ratio
 1.860.731.10
Current Ratio
 1.980.841.37
Interest Coverage
 −18.2597.9333.76
Quick Ratio
ZS
PANW
CSCO

Profitability

Metric
ZS
PANW
CSCO
Return on Assets (Normalized)
 11.57%11.97%15.60%
Return on Equity (Normalized)
 55.65%68.27%36.40%
Return on Invested Capital (Normalized)
 17.35%31.97%26.89%
Return on Assets
ZS
PANW
CSCO
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