ZSCALER INC (ZS) Stock Fundamental Analysis
USA - NASDAQ:ZS - US98980G1022 - Common Stock
292.905 USD
-0.21 (-0.07%)
ZS gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals 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 is valued quite expensive, but it does show an excellent growth.
1. Profitability
1.1 Basic Checks
In the past year ZS was profitable.
ZS had a positive operating cash flow in the past year.
In the past 5 years ZS always reported negative net income.
Each year in the past 5 years ZS had a positive operating cash flow.
1.2 Ratios
ZS has a Return On Assets of -0.65%. This is comparable to the rest of the industry: ZS outperforms 55.52% of its industry peers.
ZS has a Return On Equity (-2.31%) which is in line with its industry peers.
| 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
The Gross Margin of ZS (76.87%) is better than 72.60% of its industry peers.
In the last couple of years the Gross Margin of ZS has remained more or less at the same level.
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.
Compared to 5 years ago, ZS has more shares outstanding
The debt/assets ratio for ZS is higher compared to a year ago.
2.2 Solvency
ZS has an Altman-Z score of 6.58. This indicates that ZS is financially healthy and has little risk of bankruptcy at the moment.
ZS has a Altman-Z score of 6.58. This is in the better half of the industry: ZS outperforms 77.94% of its industry peers.
ZS has a debt to FCF ratio of 2.34. This is a good value and a sign of high solvency as ZS would need 2.34 years to pay back of all of its debts.
ZS has a better Debt to FCF ratio (2.34) than 67.26% 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.
With a Debt to Equity ratio value of 0.95, ZS is not doing good in the industry: 73.31% of the companies in the same industry are doing better.
Although ZS does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.95 | ||
| Debt/FCF | 2.34 | ||
| Altman-Z | 6.58 |
ROIC/WACCN/A
WACC10.9%
2.3 Liquidity
ZS has a Current Ratio of 2.01. This indicates that ZS is financially healthy and has no problem in meeting its short term obligations.
ZS has a Current ratio (2.01) which is comparable to the rest of the industry.
ZS has a Quick Ratio of 2.01. This indicates that ZS is financially healthy and has no problem in meeting its short term obligations.
ZS has a better Quick ratio (2.01) than 60.50% 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
The Revenue has grown by 23.31% in the past year. This is a very strong growth!
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 21.82% on average over the next years. This is a very strong growth
ZS is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 19.88% yearly.
EPS Next Y15.58%
EPS Next 2Y17.95%
EPS Next 3Y19.75%
EPS Next 5Y21.82%
Revenue Next Year23.29%
Revenue Next 2Y21.27%
Revenue Next 3Y20.75%
Revenue Next 5Y19.88%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in 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
The Price/Earnings ratio is 89.30, which means the current valuation is very expensive for ZS.
ZS's Price/Earnings ratio is in line with the industry average.
ZS's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 25.51.
The Price/Forward Earnings ratio is 77.27, which means the current valuation is very expensive for ZS.
ZS's Price/Forward Earnings ratio is in line with the industry average.
When comparing the Price/Forward Earnings ratio of ZS to the average of the S&P500 Index (34.98), we can say ZS is valued expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 89.3 | ||
| Fwd PE | 77.27 |
4.2 Price Multiples
ZS's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 63.81 | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
ZS's earnings are expected to grow with 19.75% in the coming years. This may justify a more expensive valuation.
PEG (NY)5.73
PEG (5Y)1.3
EPS Next 2Y17.95%
EPS Next 3Y19.75%
5. Dividend
5.1 Amount
ZS does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
NASDAQ:ZS (11/19/2025, 9:47:08 AM)
292.905
-0.21 (-0.07%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners56.62%
Inst Owner Change63.64%
Ins Owners35.96%
Ins Owner Change5.71%
Market Cap46.37B
Revenue(TTM)2.67B
Net Income(TTM)-41.48M
Analysts80.71
Price Target331.67 (13.23%)
Short Float %5.87%
Short Ratio4.42
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)-0.17%
PT rev (3m)2.68%
EPS NQ rev (1m)0.06%
EPS NQ rev (3m)2.31%
EPS NY rev (1m)0.01%
EPS NY rev (3m)0.48%
Revenue NQ rev (1m)0.02%
Revenue NQ rev (3m)3.04%
Revenue NY rev (1m)0%
Revenue NY rev (3m)2.33%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 89.3 | ||
| Fwd PE | 77.27 | ||
| P/S | 17.35 | ||
| P/FCF | 63.81 | ||
| P/OCF | 47.68 | ||
| P/B | 25.77 | ||
| P/tB | 34.75 | ||
| EV/EBITDA | N/A |
EPS(TTM)3.28
EY1.12%
EPS(NY)3.79
Fwd EY1.29%
FCF(TTM)4.59
FCFY1.57%
OCF(TTM)6.14
OCFY2.1%
SpS16.89
BVpS11.37
TBVpS8.43
PEG (NY)5.73
PEG (5Y)1.3
Graham Number28.96
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
ROICexgc growth 3YN/A
ROICexgc 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 | 6.58 |
F-Score4
WACC10.9%
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 Y15.58%
EPS Next 2Y17.95%
EPS Next 3Y19.75%
EPS Next 5Y21.82%
Revenue 1Y (TTM)23.31%
Revenue growth 3Y34.82%
Revenue growth 5Y44.03%
Sales Q2Q%21.31%
Revenue Next Year23.29%
Revenue Next 2Y21.27%
Revenue Next 3Y20.75%
Revenue Next 5Y19.88%
EBIT growth 1Y-0.61%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year55.15%
EBIT Next 3Y33.84%
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%
ZSCALER INC / ZS FAQ
Can you provide the ChartMill fundamental rating for ZSCALER INC?
ChartMill assigns a fundamental rating of 4 / 10 to ZS.
What is the valuation status for ZS stock?
ChartMill assigns a valuation rating of 1 / 10 to ZSCALER INC (ZS). This can be considered as Overvalued.
How profitable is ZSCALER INC (ZS) stock?
ZSCALER INC (ZS) has a profitability rating of 3 / 10.
What is the valuation of ZSCALER INC based on its PE and PB ratios?
The Price/Earnings (PE) ratio for ZSCALER INC (ZS) is 89.3 and the Price/Book (PB) ratio is 25.77.
How financially healthy is ZSCALER INC?
The financial health rating of ZSCALER INC (ZS) is 6 / 10.