The information provided on EL7.AI is for educational and informational purposes only and does not constitute financial advice.
The information provided on EL7.AI is for educational and informational purposes only and does not constitute financial advice.
| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 30 | — | 20.8x | Bottom tier | |
Growth | 60 | -23.0% | 6.1% | Around median | |
Quality | 43 | -16.3% | 6.6% | Around median | |
Safety | 56 | — | 0.7x | Around median | |
Capital Return | 24 | — | 2.02% | Bottom tier | |
Momentum | 5 | -58.4% | 4.1% | Bottom tier | |
Sentiment | 72 | 28 | 3 | Top tier |
Estimates — analyst targets and a simplified DCF, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
Zscaler, Inc. (ZS) is a global leader in cloud security, offering its Zero Trust Exchange platform designed to protect users, devices, data, and applications from cyber threats without relying on traditional firewalls. The company generates the majority of its revenue from customer subscriptions to its integrated cloud platform, which serves large enterprises and government entities worldwide through core products such as Zscaler Internet Access (ZIA) and Zscaler Private Access (ZPA) to secure user connections wherever they are.
During the third quarter of fiscal year 2026, Zscaler achieved strong financial results with revenue reaching $850 million, representing a 25% year-over-year growth and 4% sequentially, exceeding the upper limit of management's prior guidance. Annual Recurring Revenue (ARR) increased by 25% to reach $3.5 billion, supported by new net ARR of $166 million during the quarter. The company also achieved a record non-GAAP operating margin of 23%, and a gross margin of 80.7% compared to 80.3% in the same quarter last year, demonstrating high operating efficiency and continued ability to scale.
Zscaler stock currently trades below the average price target of Wall Street analysts of $193.23, with the analysts' target range spanning from a low of $145 to a high of $250. The general analyst consensus indicates a Buy recommendation, reflecting confidence in the company's ability to lead the cloud security and Zero Trust solutions sector over the long term despite the expected growth slowdown in fiscal year 2027 and current valuation pressures.
Figures in the text are as of 2026-06-15; the live price is shown at the top of the page.
Zscaler expects to achieve revenue ranging between $875 million and $878 million in the fourth quarter of fiscal year 2026, representing a 22% year-over-year growth. For the full fiscal year 2026, the company expects revenue between $3.33 billion and $3.34 billion, with total ARR expected to range between $3.74 billion and $3.75 billion. Management also projects non-GAAP operating income between $755 million and $757 million, with earnings per share ranging between $4.10 and $4.11.
The sharp decline in the stock price came after the company provided a conservative preliminary outlook for fiscal year 2027, projecting revenue and total ARR growth of only 16% to 17%. Investors viewed this guidance as a significant slowdown compared to the current growth rates of 25% in the third quarter of 2026. Additionally, market sentiment was affected by the departure of two key sales leaders under the supervision of Chief Revenue Officer Mike Rich, raising concerns about the stability of operational execution in the short term.
Zscaler announced on May 21, 2026, its intention to acquire Symmetry Systems to integrate its innovative Access Graph technology with the Zero Trust Exchange platform. This technology enables precise mapping of how different identities, applications, and data sources connect across the enterprise, which helps secure AI agents that represent a new and critical link in cybersecurity. This transaction is entirely strategic for developing data governance and security policy solutions, although Symmetry's current financial contribution to ARR remains minimal, in the low single-digit millions of dollars.
Automated analysis for informational purposes only — not investment advice.
Red Canary ended the third quarter of fiscal year 2026 with an Annual Recurring Revenue of $127 million, and Zscaler raised its full fiscal year 2026 ARR outlook for Red Canary to $137 million compared to the previous forecast of $130 million. The company plans to launch an integrated SecOps solution incorporating Red Canary's technologies during fiscal year 2027 to boost cross-selling among existing customers. However, management expects Red Canary's new net ARR to grow at a slower rate than the rest of Zscaler's core business during the upcoming transition period.
Zscaler faces mounting pressures due to rising prices for memory, processors, and data center equipment resulting from the AI demand boom, which led it to raise prices for its branch appliances earlier this year. As a result of these developments, the company pulled forward a portion of its planned capital investments for 2027 into the fourth quarter of 2026 to take advantage of current pricing, lowering its 2026 free cash flow margin guidance to between 22.8% and 23.3%. Management also expects capital expenditures as a percentage of revenue to rise by up to 200 basis points in fiscal year 2027 compared to 2026 levels.