📊 ZS Key Takeaways
Is Zscaler, Inc. (ZS) a Good Investment?
Zscaler demonstrates strong fundamental business health with 23.3% revenue growth, exceptional 76.8% gross margins, and robust free cash flow of $772.9M (31.5% FCF margin). However, operating losses of $117.8M at $2.5B revenue scale indicate material execution challenges in controlling expenses, necessitating evidence of a clear path to profitability before a more positive assessment is warranted.
Zscaler, Inc. Key Strengths (ZS)
- Exceptional gross margin of 76.8% demonstrates strong product economics and pricing power
- Robust free cash flow generation of $772.9M with 31.5% FCF margin despite GAAP losses
- Solid liquidity position with 1.86x current ratio, $982.1M cash, and moderate 0.49x debt-to-equity leverage
ZS Stock Risks: Zscaler, Inc. Investment Risks
- Operating losses of $117.8M despite $2.5B revenue indicates poor cost structure and inability to achieve operating leverage at scale
- Significant gap between positive operating cash flow ($850.4M) and negative net income (-$59.8M) suggests either unsustainable stock-based compensation or accounting deterioration
- Negative returns on equity (-2.5%) and assets (-0.8%) indicate shareholder capital is not being deployed efficiently
Key Metrics to Watch
- Operating margin expansion trajectory toward breakeven and profitability
- Stock-based compensation as percentage of revenue and operating cash flow trend
- Operating expense ratio and management's ability to achieve operating leverage
Zscaler, Inc. (ZS) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The 31.5% free cash flow margin provides substantial flexibility for dividends, buybacks, and strategic investments.
ZS Profit Margin, ROE & Profitability Analysis
ZS vs Technology Sector: How Zscaler, Inc. Compares
How Zscaler, Inc. compares to Technology sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Zscaler, Inc. Stock Overvalued? ZS Valuation Analysis 2026
Based on fundamental analysis, Zscaler, Inc. shows some fundamental concerns relative to the Technology sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Zscaler, Inc. Balance Sheet: ZS Debt, Cash & Liquidity
ZS Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Zscaler, Inc.'s revenue has grown significantly by 297% over the 5-year period, indicating strong business expansion. The most recent EPS of $-1.40 indicates the company is currently unprofitable.
ZS Revenue Growth, EPS Growth & YoY Performance
ZS Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2026 | $678.0M | -$4.1M | $-0.03 |
| Q2 2026 | $647.9M | -$7.7M | $-0.05 |
| Q1 2026 | $628.0M | -$11.6M | $-0.07 |
| Q3 2025 | $553.2M | -$4.1M | $-0.03 |
| Q2 2025 | $525.0M | -$7.7M | $-0.05 |
| Q1 2025 | $496.7M | -$12.1M | $-0.08 |
| Q3 2024 | $418.8M | $19.1M | $0.12 |
| Q2 2024 | $387.6M | -$28.5M | $-0.19 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Zscaler, Inc. Dividends, Buybacks & Capital Allocation
ZS SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Zscaler, Inc. (CIK: 0001713683)
📋 Recent SEC Filings
❓ Frequently Asked Questions about ZS
What is the AI rating for ZS?
Zscaler, Inc. (ZS) has an AI grade of B with 72% confidence, based on fundamental analysis of SEC EDGAR filings.
What are ZS's key strengths?
Claude: Exceptional gross margin of 76.8% demonstrates strong product economics and pricing power. Robust free cash flow generation of $772.9M with 31.5% FCF margin despite GAAP losses.
What are the risks of investing in ZS?
Claude: Operating losses of $117.8M despite $2.5B revenue indicates poor cost structure and inability to achieve operating leverage at scale. Significant gap between positive operating cash flow ($850.4M) and negative net income (-$59.8M) suggests either unsustainable stock-based compensation or accounting deterioration.
What is ZS's revenue and growth?
Zscaler, Inc. reported revenue of $2.5B.
Does ZS pay dividends?
Zscaler, Inc. does not currently pay dividends.
Where can I find ZS SEC filings?
Official SEC filings for Zscaler, Inc. (CIK: 0001713683) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is ZS's EPS?
Zscaler, Inc. has a diluted EPS of $-0.37.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined grade reflects both perspectives for balanced insights.
What is ZS's fundamental grade?
Based on our AI fundamental analysis in June 2026, Zscaler, Inc. has a B grade with 72% confidence. Review the strengths and risks sections above for full context. This is not investment advice.
Is ZS stock overvalued or undervalued?
Valuation metrics for ZS: ROE of -2.5% (sector avg: 22%), net margin of -2.4% (sector avg: 18%). Compare these metrics with sector averages to assess valuation.
What is ZS's AI grade for 2026?
Our dual AI analysis gives Zscaler, Inc. a combined B grade for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is ZS's free cash flow?
Zscaler, Inc.'s operating cash flow is $850.4M, with capital expenditures of $77.5M. FCF margin is 31.5%.
How does ZS compare to other Technology stocks?
Vs Technology sector averages: Net margin -2.4% (avg: 18%), ROE -2.5% (avg: 22%), current ratio 1.86 (avg: 2.5).