Zscaler, Inc.
$134.37
-14%Zscaler, Inc. operates as a cloud security company worldwide. The company provides Zscaler Internet Access solution that provides users, servers, operational technology, Internet of Things device secure access to externally managed applications, including software-as-a-service (SaaS) applications and Internet destinations; and Zscaler Private Access solution, which is designed to provide access to managed applications hosted internally in data centers, and private or public clouds. It also offers Zscaler Digital Experience that measures end-to-end user experience across business applications, as well as provides an easy to understand digital experience score for each user, application, and location within an enterprise. In addition, the company provides workload segmentation solutions comprising Zscaler Cloud Security Posture Management that identifies and remediates application misconfigurations in SaaS, infrastructure as a service, and platform as a service to reduce risk and ensure compliance with industry and organizational benchmarks; and Zscaler Cloud Workload Segmentation, which is designed to secure application-to-application communications inside public clouds and data centers to stop lateral threat movement, as well as prevents application compromise and reduces the risk of data breaches. Its platform modules include Zscaler Central Authority, Zscaler Enforcement Node, and Zscaler Log Servers. It serves customers in airlines and transportation, conglomerates, consumer goods and retail, financial services, healthcare, manufacturing, media and communications, public sector and education, technology, and telecommunications services industries. The company was formerly known as SafeChannel, Inc., and changed its name to Zscaler, Inc. in August 2008. Zscaler, Inc. was incorporated in 2007 and is headquartered in San Jose, California.
At a Glance
Live SnapshotIntrinsic Alpha Methodology
Thesis Lenses
Signal
Medium confidenceValuation multiple is compressed (P/E -497.7).
Valuation inputs: P/E -497.7, earnings yield N/A, momentum -13.7%.
If multiples stay elevated while momentum fades, downside repricing risk rises.
Driver
High confidenceReturn profile is soft (ROE -2.3%, ROIC -3.2%).
Profitability stack: net margin -1.6%, ROE -2.3%, ROIC -3.2%.
Quality deterioration often appears in margins before it shows up in headline EPS.
Risk
High confidenceDownside profile is elevated and scenario stress-testing is essential.
Risk factors: liabilities/assets +72.0%, momentum -13.7%, net margin -1.6%.
Higher leverage with weak momentum and thin margins can amplify drawdown severity.
Zscaler, Inc. Market vs Earnings Trajectory
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Zscaler, Inc. Fair Value Envelope
Zscaler, Inc. Profit Bridge
Profitability Analysis
Gross Margin
Exceptional pricing power and cost management. The company retains over half of revenue after direct costs.
Operating Margin
Operating losses indicate the core business is unprofitable. Requires restructuring or revenue growth.
Net Profit Margin
Net losses indicate the company is burning cash. Sustainability depends on path to profitability.
Profitability Insight
Margin squeeze alert: Healthy gross margins but weak operating margins suggest excessive operating expenses. Cost optimization could unlock significant value.
Zscaler, Inc. Cash Conversion Engine
Cash Flow Quality Analysis
FCF Conversion Rate
Negative free cash flow despite positive earnings raises concerns about cash generation ability or heavy capital requirements.
CapEx Intensity
Moderate capital requirements typical of many stable businesses. Healthy balance between reinvestment and cash generation.
FCF Growth Trend
Strong FCF growth demonstrates improving cash generation and business momentum. Positive signal for sustainability.
Working Capital Impact
Working capital inflow boosted cash flow. Efficient management of receivables, inventory, and payables contributing positively.
Zscaler, Inc. Funding & Solvency Profile
Financial Health Analysis
Current Ratio
Strong liquidity. The company has adequate resources to meet short-term liabilities.
Debt-to-Equity Ratio
Elevated leverage. Debt exceeds equity, which amplifies both gains and risks. Monitor debt servicing ability.
Working Capital
Strong working capital position provides significant operational flexibility and financial cushion.
Asset Composition
Asset-light business model with high liquidity. Majority of assets are easily convertible to cash.
Zscaler, Inc. Street Expectations Map
Wall Street analysts project that ZS stock may rise significantly over the coming 12 months. The consensus 1-year price target stands at 199.77, with estimates ranging from a low of 145.00 to a high of 320.00.
The consensus 1-year price target stands at 199.77, with estimates ranging from a low of 145.00 to a high of 320.00.
Analyst Consensus Analysis
Upside Potential
Substantial upside potential. Analysts see significant value gap, suggesting the stock may be materially undervalued at current levels.
Analyst Agreement
High uncertainty. Very wide target spread indicates significant disagreement among analystsโmajor valuation uncertainty or transformation underway.
Analyst Conviction
High uncertainty: Wide dispersion indicates analysts struggle to agree on valuationโproceed with caution and independent analysis.
Market Sentiment Insight
High risk, high reward: Substantial upside potential exists, but wide analyst disagreement signals execution risk or unclear catalysts. Thorough due diligence essential before committing capital.
Zscaler, Inc. Insider Positioning
During the last 12 months, insiders have sold $38.05M worth of ZS shares, with no buying activity reported.
3 Months
0
0.00
15.3K
2.39M
-2.4M
-$2.39M
3-6 Months
0
0.00
23.4K
5.42M
-5.4M
-$5.42M
6-9 Months
0
0.00
40.9K
11.66M
-11.7M
-$11.66M
9-12 Months
0
0.00
61.8K
18.59M
-18.6M
-$18.59M
Top Buyers
No buying activity
Top Sellers
Rich Michael J.
Officer: Cro And President Of Ww Sales
$9.06M
Schlossman Robert
Officer: Chief Legal Officer
$6.47M
Geller Adam
Officer: Chief Product Officer
$6.42M
Brown Andrew William Fraser
Director
$5.92M
Judge Raj
Director, Officer: Evp, Corp. Strategy & Ventures
$3.35M
Insider Activity Analysis
Net Insider Sentiment
Strong bearish signal with $38.05M net selling. Heavy insider selling may indicate concerns about valuation or near-term prospects.
Buy/Sell Ratio
Very poor ratio. Heavy selling with minimal buying suggests insiders may be concerned about valuation or outlook.
Recent Trend (3 Months)
Heavy recent selling activity. Recent insider sales notably exceed purchasesโmay warrant investigation into company developments.
Insider Participation
5 insider sellers vs. 0 buyers. Widespread selling across multiple insiders may signal concerns.
Insider Activity Insight
Multiple red flags: Heavy selling, numerous sellers, and continued recent selling create a concerning pattern. Investigate fundamental drivers and consider whether company guidance or industry conditions have deteriorated.
No Dividend Yield Data
ZS has not reported any dividend yield values in the available annual periods.
zs Dividend History
Learning Layer
Related Guides
Build conviction on ZS by pairing this stock hub with focused valuation guides.
Research Paths
Snapshot
Start with context, operating signals, and key market metrics.
Value Model
Stress test fair value across bear, base, and bull assumptions.
Statements
Validate revenue quality, margins, and balance sheet durability.
Earnings Call
Read management commentary and compare it with reported outcomes.
Dividends
Check payout sustainability and long-term distribution behavior.
Analyst Expectations
Review consensus spread and where estimate risk is concentrated.