ZSCALER INC (ZS) Stock Fundamental Analysis
NASDAQ:ZS - US98980G1022 - Common Stock
277.05 USD
-3.37 (-1.2%)
277.5 USD
+0.45 (+0.16%)
Taking everything into account, ZS scores 4 out of 10 in our fundamental rating. ZS was compared to 282 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 expensive, but it does show an excellent growth.
1. Profitability
1.1 Basic Checks
ZS had positive earnings in the past year.
ZS had a positive operating cash flow in the past year.
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 (-0.73%) which is comparable to the rest of the industry.
With a decent Return On Equity value of -2.15%, ZS is doing good in the industry, outperforming 60.28% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.73% | ||
| ROE | -2.15% | ||
| ROIC | N/A |
ROA(3y)-6.87%
ROA(5y)-7.7%
ROE(3y)-33.5%
ROE(5y)-34.76%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
Looking at the Gross Margin, with a value of 77.38%, ZS is in the better half of the industry, outperforming 74.82% of the companies in the same industry.
In the last couple of years the Gross Margin of ZS has remained more or less at the same level.
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 | 77.38% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y0.14%
GM growth 5Y-0.59%
2. Health
2.1 Basic Checks
ZS does not have a ROIC to compare to the WACC, probably because it is not profitable.
ZS has more shares outstanding than it did 1 year ago.
ZS has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, ZS has an improved debt to assets ratio.
2.2 Solvency
ZS has an Altman-Z score of 7.67. This indicates that ZS is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 7.67, ZS belongs to the top of the industry, outperforming 80.50% of the companies in the same industry.
ZS has a debt to FCF ratio of 1.66. This is a very positive value and a sign of high solvency as it would only need 1.66 years to pay back of all of its debts.
ZS has a Debt to FCF ratio of 1.66. This is in the better half of the industry: ZS outperforms 69.15% of its industry peers.
ZS has a Debt/Equity ratio of 0.64. This is a neutral value indicating ZS is somewhat dependend on debt financing.
ZS has a Debt to Equity ratio of 0.64. This is in the lower half of the industry: ZS underperforms 68.44% of its industry peers.
Even though the debt/equity ratio score it not favorable for ZS, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.64 | ||
| Debt/FCF | 1.66 | ||
| Altman-Z | 7.67 |
ROIC/WACCN/A
WACC11.08%
2.3 Liquidity
A Current Ratio of 1.24 indicates that ZS should not have too much problems paying its short term obligations.
ZS has a Current ratio of 1.24. This is in the lower half of the industry: ZS underperforms 60.64% of its industry peers.
A Quick Ratio of 1.24 indicates that ZS should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.24, ZS perfoms like the industry average, outperforming 40.07% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.24 | ||
| Quick Ratio | 1.24 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 10.85% over the past year.
The Earnings Per Share has been growing by 70.72% on average over the past years. This is a very strong growth
The Revenue has grown by 25.46% in the past year. This is a very strong growth!
Measured over the past years, ZS shows a very strong growth in Revenue. The Revenue has been growing by 48.24% on average per year.
EPS 1Y (TTM)10.85%
EPS 3Y81.9%
EPS 5Y70.72%
EPS Q2Q%-4.55%
Revenue 1Y (TTM)25.46%
Revenue growth 3Y47.68%
Revenue growth 5Y48.24%
Sales Q2Q%22.57%
3.2 Future
Based on estimates for the next years, ZS will show a quite strong growth in Earnings Per Share. The EPS will grow by 17.65% on average per year.
ZS is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 21.26% yearly.
EPS Next Y2.79%
EPS Next 2Y8.79%
EPS Next 3Y12.86%
EPS Next 5Y17.65%
Revenue Next Year24.11%
Revenue Next 2Y22.28%
Revenue Next 3Y21.46%
Revenue Next 5Y21.26%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of 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
Based on the Price/Earnings ratio of 84.72, the valuation of ZS can be described as expensive.
The rest of the industry has a similar Price/Earnings ratio as ZS.
ZS's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 27.08.
With a Price/Forward Earnings ratio of 73.38, ZS can be considered very expensive at the moment.
ZS's Price/Forward Earnings ratio is in line with the industry average.
The average S&P500 Price/Forward Earnings ratio is at 22.72. ZS is valued rather expensively when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 84.72 | ||
| Fwd PE | 73.38 |
4.2 Price Multiples
The rest of the industry has a similar Price/Free Cash Flow ratio as ZS.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 62.42 | ||
| EV/EBITDA | N/A |
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 12.86% in the coming years.
PEG (NY)30.37
PEG (5Y)1.2
EPS Next 2Y8.79%
EPS Next 3Y12.86%
5. Dividend
5.1 Amount
No dividends for ZS!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
277.05
-3.37 (-1.2%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners58.45%
Inst Owner Change-1.69%
Ins Owners36.57%
Ins Owner Change1.25%
Market Cap43.14B
Analysts80
Price Target323.01 (16.59%)
Short Float %6.42%
Short Ratio3.29
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)8.9%
Min EPS beat(2)8.39%
Max EPS beat(2)9.41%
EPS beat(4)4
Avg EPS beat(4)14.72%
Min EPS beat(4)8.39%
Max EPS beat(4)22.98%
EPS beat(8)8
Avg EPS beat(8)22.02%
EPS beat(12)12
Avg EPS beat(12)19.58%
EPS beat(16)16
Avg EPS beat(16)23.01%
Revenue beat(2)0
Avg Revenue beat(2)-1.12%
Min Revenue beat(2)-1.21%
Max Revenue beat(2)-1.03%
Revenue beat(4)2
Avg Revenue beat(4)-0.08%
Min Revenue beat(4)-1.21%
Max Revenue beat(4)1.35%
Revenue beat(8)6
Avg Revenue beat(8)0.62%
Revenue beat(12)9
Avg Revenue beat(12)0.61%
Revenue beat(16)13
Avg Revenue beat(16)1.4%
PT rev (1m)0%
PT rev (3m)32.63%
EPS NQ rev (1m)0%
EPS NQ rev (3m)3.23%
EPS NY rev (1m)-0.25%
EPS NY rev (3m)3.76%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.1%
Revenue NY rev (1m)-0.07%
Revenue NY rev (3m)0.37%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 84.72 | ||
| Fwd PE | 73.38 | ||
| P/S | 16.94 | ||
| P/FCF | 62.42 | ||
| P/OCF | 46.61 | ||
| P/B | 23.9 | ||
| P/tB | 32.29 | ||
| EV/EBITDA | N/A |
EPS(TTM)3.27
EY1.18%
EPS(NY)3.78
Fwd EY1.36%
FCF(TTM)4.44
FCFY1.6%
OCF(TTM)5.94
OCFY2.15%
SpS16.36
BVpS11.59
TBVpS8.58
PEG (NY)30.37
PEG (5Y)1.2
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.73% | ||
| ROE | -2.15% | ||
| ROCE | N/A | ||
| ROIC | N/A | ||
| ROICexc | N/A | ||
| ROICexgc | N/A | ||
| OM | N/A | ||
| PM (TTM) | N/A | ||
| GM | 77.38% | ||
| FCFM | 27.14% |
ROA(3y)-6.87%
ROA(5y)-7.7%
ROE(3y)-33.5%
ROE(5y)-34.76%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y0.14%
GM growth 5Y-0.59%
F-Score4
Asset Turnover0.48
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.64 | ||
| Debt/FCF | 1.66 | ||
| Debt/EBITDA | N/A | ||
| Cap/Depr | 210.64% | ||
| Cap/Sales | 9.2% | ||
| Interest Coverage | N/A | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.24 | ||
| Quick Ratio | 1.24 | ||
| Altman-Z | 7.67 |
F-Score4
WACC11.08%
ROIC/WACCN/A
Cap/Depr(3y)205.41%
Cap/Depr(5y)204.29%
Cap/Sales(3y)8.42%
Cap/Sales(5y)9.19%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)10.85%
EPS 3Y81.9%
EPS 5Y70.72%
EPS Q2Q%-4.55%
EPS Next Y2.79%
EPS Next 2Y8.79%
EPS Next 3Y12.86%
EPS Next 5Y17.65%
Revenue 1Y (TTM)25.46%
Revenue growth 3Y47.68%
Revenue growth 5Y48.24%
Sales Q2Q%22.57%
Revenue Next Year24.11%
Revenue Next 2Y22.28%
Revenue Next 3Y21.46%
Revenue Next 5Y21.26%
EBIT growth 1Y10.61%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year68.94%
EBIT Next 3Y37.73%
EBIT Next 5YN/A
FCF growth 1Y125.05%
FCF growth 3Y59.67%
FCF growth 5Y83.91%
OCF growth 1Y115.44%
OCF growth 3Y56.87%
OCF growth 5Y68.16%