ZSCALER INC (ZS) Stock Fundamental Analysis
USA - NASDAQ:ZS - US98980G1022 - Common Stock
294.27 USD
+3.16 (+1.09%)
294.32 USD
+0.05 (+0.02%)
Overall ZS gets a fundamental rating of 5 out of 10. We evaluated ZS against 281 industry peers in the Software industry. The financial health of ZS is average, but there are quite some concerns on its profitability. ZS shows excellent growth, but is valued quite expensive already.
1. Profitability
1.1 Basic Checks
In the past year ZS was profitable.
In the past year ZS had a positive cash flow from operations.
In the past 5 years ZS always reported negative net income.
In the past 5 years ZS always reported a positive cash flow from operatings.
1.2 Ratios
ZS's Return On Assets of -0.65% is in line compared to the rest of the industry. ZS outperforms 57.65% of its industry peers.
ZS has a Return On Equity (-2.31%) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.65% | ||
| ROE | -2.31% | ||
| ROIC | N/A |
ROA(3y)-2.49%
ROA(5y)-6.57%
ROE(3y)-11.58%
ROE(5y)-30.47%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
ZS's Gross Margin of 76.87% is fine compared to the rest of the industry. ZS outperforms 72.60% of its industry peers.
ZS's Gross Margin has been stable in the last couple of years.
ZS does not have Profit Margin and Operating Margin available, so we won't be analyzing them here.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | N/A | ||
| PM (TTM) | N/A | ||
| GM | 76.87% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-0.4%
GM growth 5Y-0.23%
2. Health
2.1 Basic Checks
ZS does not have a ROIC to compare to the WACC, probably because it is not profitable.
The number of shares outstanding for ZS has been increased compared to 1 year ago.
ZS has more shares outstanding than it did 5 years ago.
The debt/assets ratio for ZS is higher compared to a year ago.
2.2 Solvency
ZS has an Altman-Z score of 6.50. This indicates that ZS is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of ZS (6.50) is better than 74.73% of its industry peers.
The Debt to FCF ratio of ZS is 2.34, which is a good value as it means it would take ZS, 2.34 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of ZS (2.34) is better than 65.84% of its industry peers.
ZS has a Debt/Equity ratio of 0.95. This is a neutral value indicating ZS is somewhat dependend on debt financing.
The Debt to Equity ratio of ZS (0.95) is worse than 72.60% 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 | 0.95 | ||
| Debt/FCF | 2.34 | ||
| Altman-Z | 6.5 |
ROIC/WACCN/A
WACC11.08%
2.3 Liquidity
A Current Ratio of 2.01 indicates that ZS has no problem at all paying its short term obligations.
With a decent Current ratio value of 2.01, ZS is doing good in the industry, outperforming 62.28% of the companies in the same industry.
A Quick Ratio of 2.01 indicates that ZS has no problem at all paying its short term obligations.
ZS has a better Quick ratio (2.01) than 63.35% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.01 | ||
| Quick Ratio | 2.01 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 2.82% over the past year.
The Earnings Per Share has been growing by 68.71% on average over the past years. This is a very strong growth
ZS shows a strong growth in Revenue. In the last year, the Revenue has grown by 23.31%.
The Revenue has been growing by 44.03% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)2.82%
EPS 3Y68.14%
EPS 5Y68.71%
EPS Q2Q%1.14%
Revenue 1Y (TTM)23.31%
Revenue growth 3Y34.82%
Revenue growth 5Y44.03%
Sales Q2Q%21.31%
3.2 Future
The Earnings Per Share is expected to grow by 22.16% on average over the next years. This is a very strong growth
Based on estimates for the next years, ZS will show a very strong growth in Revenue. The Revenue will grow by 20.23% on average per year.
EPS Next Y15.56%
EPS Next 2Y17.93%
EPS Next 3Y19.43%
EPS Next 5Y22.16%
Revenue Next Year23.29%
Revenue Next 2Y21.46%
Revenue Next 3Y20.61%
Revenue Next 5Y20.23%
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.
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 89.72, ZS can be considered very expensive at the moment.
ZS's Price/Earnings is on the same level as the industry average.
When comparing the Price/Earnings ratio of ZS to the average of the S&P500 Index (27.38), we can say ZS is valued expensively.
The Price/Forward Earnings ratio is 77.64, which means the current valuation is very expensive for ZS.
ZS's Price/Forward Earnings is on the same level as the industry average.
The average S&P500 Price/Forward Earnings ratio is at 22.86. ZS is valued rather expensively when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 89.72 | ||
| Fwd PE | 77.64 |
4.2 Price Multiples
ZS's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 63.05 | ||
| 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 19.43% in the coming years.
PEG (NY)5.77
PEG (5Y)1.31
EPS Next 2Y17.93%
EPS Next 3Y19.43%
5. Dividend
5.1 Amount
ZS does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
294.27
+3.16 (+1.09%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners56.62%
Inst Owner Change-1.67%
Ins Owners35.96%
Ins Owner Change1.25%
Market Cap45.82B
Analysts79.64
Price Target332.23 (12.9%)
Short Float %5.74%
Short Ratio3.33
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)8.32%
Min EPS beat(2)8.25%
Max EPS beat(2)8.39%
EPS beat(4)4
Avg EPS beat(4)11.04%
Min EPS beat(4)8.25%
Max EPS beat(4)18.11%
EPS beat(8)8
Avg EPS beat(8)19.74%
EPS beat(12)12
Avg EPS beat(12)18.67%
EPS beat(16)16
Avg EPS beat(16)20.39%
Revenue beat(2)0
Avg Revenue beat(2)-1.22%
Min Revenue beat(2)-1.22%
Max Revenue beat(2)-1.21%
Revenue beat(4)1
Avg Revenue beat(4)-0.72%
Min Revenue beat(4)-1.22%
Max Revenue beat(4)0.57%
Revenue beat(8)5
Avg Revenue beat(8)0.13%
Revenue beat(12)8
Avg Revenue beat(12)0.42%
Revenue beat(16)12
Avg Revenue beat(16)1.18%
PT rev (1m)2.85%
PT rev (3m)17.02%
EPS NQ rev (1m)2.24%
EPS NQ rev (3m)2.22%
EPS NY rev (1m)0.39%
EPS NY rev (3m)2.2%
Revenue NQ rev (1m)3.02%
Revenue NQ rev (3m)3.02%
Revenue NY rev (1m)2.33%
Revenue NY rev (3m)2.4%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 89.72 | ||
| Fwd PE | 77.64 | ||
| P/S | 17.14 | ||
| P/FCF | 63.05 | ||
| P/OCF | 47.12 | ||
| P/B | 25.46 | ||
| P/tB | 34.34 | ||
| EV/EBITDA | N/A |
EPS(TTM)3.28
EY1.11%
EPS(NY)3.79
Fwd EY1.29%
FCF(TTM)4.67
FCFY1.59%
OCF(TTM)6.25
OCFY2.12%
SpS17.17
BVpS11.56
TBVpS8.57
PEG (NY)5.77
PEG (5Y)1.31
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.65% | ||
| ROE | -2.31% | ||
| ROCE | N/A | ||
| ROIC | N/A | ||
| ROICexc | N/A | ||
| ROICexgc | N/A | ||
| OM | N/A | ||
| PM (TTM) | N/A | ||
| GM | 76.87% | ||
| FCFM | 27.19% |
ROA(3y)-2.49%
ROA(5y)-6.57%
ROE(3y)-11.58%
ROE(5y)-30.47%
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 3Y-0.4%
GM growth 5Y-0.23%
F-Score4
Asset Turnover0.42
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.95 | ||
| Debt/FCF | 2.34 | ||
| Debt/EBITDA | N/A | ||
| Cap/Depr | 202.8% | ||
| Cap/Sales | 9.19% | ||
| Interest Coverage | N/A | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 2.01 | ||
| Quick Ratio | 2.01 | ||
| Altman-Z | 6.5 |
F-Score4
WACC11.08%
ROIC/WACCN/A
Cap/Depr(3y)212%
Cap/Depr(5y)195.75%
Cap/Sales(3y)8.71%
Cap/Sales(5y)8.62%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)2.82%
EPS 3Y68.14%
EPS 5Y68.71%
EPS Q2Q%1.14%
EPS Next Y15.56%
EPS Next 2Y17.93%
EPS Next 3Y19.43%
EPS Next 5Y22.16%
Revenue 1Y (TTM)23.31%
Revenue growth 3Y34.82%
Revenue growth 5Y44.03%
Sales Q2Q%21.31%
Revenue Next Year23.29%
Revenue Next 2Y21.46%
Revenue Next 3Y20.61%
Revenue Next 5Y20.23%
EBIT growth 1Y-0.61%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year55.15%
EBIT Next 3Y33.05%
EBIT Next 5YN/A
FCF growth 1Y24.23%
FCF growth 3Y46.46%
FCF growth 5Y92.49%
OCF growth 1Y24.7%
OCF growth 3Y44.56%
OCF growth 5Y65.09%