📊 ZS Key Takeaways
Is Zscaler, Inc. (ZS) a Good Investment?
Zscaler demonstrates exceptional free cash flow generation ($617.3M, 38.5% FCF margin) with industry-leading 76.6% gross margins, indicating strong competitive positioning and unit economics in cloud security. However, persistent operating losses of -$88.1M despite $1.6B revenue and 23.3% YoY growth raise profitability path concerns for a mature public company; the strong balance sheet (1.9x current ratio, 0.52x debt/equity) and robust cash conversion provide financial flexibility to pursue path to profitability.
Why Buy Zscaler, Inc. Stock? ZS Key Strengths
- Exceptional free cash flow of $617.3M with 38.5% FCF margin demonstrates underlying business health despite GAAP losses
- Industry-leading gross margins of 76.6% indicate strong pricing power, efficient delivery model, and competitive moat in cloud security
- Conservative balance sheet with $1.2B cash, 0.52x debt/equity ratio, and 1.9x current ratio provides substantial financial flexibility
ZS Stock Risks: Zscaler, Inc. Investment Risks
- Operating loss of -$88.1M and net loss of -$45.9M persist despite $1.6B revenue and maturity; profitability timeline unclear
- Negative interest coverage of -21.9x and negative ROE (-2.1%) and ROA (-0.7%) indicate value destruction on reported basis
- Heavy operational expense burden or stock-based compensation obscuring true economics; disconnect between cash and GAAP earnings requires monitoring
Key Metrics to Watch
- Path to operating profitability and timeline to positive operating margin
- Operating cash flow sustainability and free cash flow conversion ratio
- Gross margin trajectory and customer acquisition cost trends
Zscaler, Inc. (ZS) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The 38.5% 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 |
|---|---|---|---|
| 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 |
| Q3 2023 | $286.8M | -$46.0M | $-0.32 |
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 rating of BUY with 65% confidence, based on fundamental analysis of SEC EDGAR filings.
What are ZS's key strengths?
Claude: Exceptional free cash flow of $617.3M with 38.5% FCF margin demonstrates underlying business health despite GAAP losses. Industry-leading gross margins of 76.6% indicate strong pricing power, efficient delivery model, and competitive moat in cloud security.
What are the risks of investing in ZS?
Claude: Operating loss of -$88.1M and net loss of -$45.9M persist despite $1.6B revenue and maturity; profitability timeline unclear. Negative interest coverage of -21.9x and negative ROE (-2.1%) and ROA (-0.7%) indicate value destruction on reported basis.
What is ZS's revenue and growth?
Zscaler, Inc. reported revenue of $1.6B.
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 $-0.29.
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 rating reflects both perspectives for balanced insights.
Is ZS a good stock to buy right now?
Based on our AI fundamental analysis in April 2026, Zscaler, Inc. has a BUY rating with 65% confidence. The AI analysis suggests favorable fundamentals based on SEC filings. This is not investment advice.
Is ZS stock overvalued or undervalued?
Valuation metrics for ZS: ROE of -2.1% (sector avg: 22%), net margin of -2.9% (sector avg: 18%). Compare these metrics with sector averages to assess valuation.
Should I buy ZS stock in 2026?
Our dual AI analysis gives Zscaler, Inc. a combined BUY rating 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 $652.4M, with capital expenditures of $35.1M. FCF margin is 38.5%.
How does ZS compare to other Technology stocks?
Vs Technology sector averages: Net margin -2.9% (avg: 18%), ROE -2.1% (avg: 22%), current ratio 1.90 (avg: 2.5).