Zscaler, Inc. (ZS) on Decifer

Why it ranks here

• It is not profitable yet and it now funds itself from its own cash.
• Revenue is growing about 25% a year, profits are expected to grow 15%, and growth is speeding up, not slowing down.
• It keeps a high share of every sale as profit, and that has stayed steady over the years, a sign of real pricing power, with profitability widening as it grows.
• It is riding an active market tailwind but its balance sheet leaves little room to fund growth.
• We do not have a clean read on how it is run yet.
• Our durability check found pressure on this name, which costs it a few points.
• ZS is one of 1 credible suppliers of zero-trust access for the thesis: Enterprises move AI out of pilots into production agents that act on core data and workflows, forcing a paired buildout of identity, network and data security around every agent. Pricing of this thesis has not been assessed.

The current read

The evidence on ZS points in two directions at once: the intelligence feed flags this name as connected to what is moving markets now, while price is lagging the market story behind this name, a sign the connection is not paying off. Until one side gives way, treat the picture as unresolved rather than a clean story.

Themes

• Cybersecurity & Identity: Cloud adoption, remote work and escalating breach costs are structurally increasing the share of IT budgets dedicated to security and identity.

Read the full ZS research brief · See all quality rankings

Intelligence data powered by Decifer. Not financial advice. For informational purposes only.