# Zscaler (ZS)

Sector: Cybersecurity software

| Field | Value |
|---|---|
| Price | $193.80 |
| Market cap | $32B |
| Intrinsic value source | Analysts |
| Data as of | 2026-11-12 |
| Next earnings | 2026-11-24 (estimate) |

Analysts: Bullish

Picks: Top pick

Discount category: Below intrinsic value

## In short

The market prices Zscaler as a fast-growing software company with little GAAP profit and heavy stock pay, and steady growth with rising free cash flow can lift its value.

## Themes and gap

- Themes: AI disruption risk (ai-disruption)
- Gap type: Can close (closable)
- Why: The Q1 report in late 2026 and the fiscal 2027 results show whether growth and free cash flow hold near the outlook.

## About

Zscaler, Inc. sells a cloud security platform based on zero trust. It connects users, workloads, branches and AI agents directly to the applications they need without placing them on the network. It has about 11,000 customers, including over 40% of the Forbes Global 2000. Revenue was $3,353 million in fiscal 2026 (the year ended July 31, 2026), up 25%, and annual recurring revenue (ARR) was $3,771 million at year end, up 25%, or 20% without Red Canary, which Zscaler bought on August 1, 2025 for $651.4 million in cash. International customers made 47% of fiscal 2026 revenue. Jay Chaudhry is founder, chairman and Chief Executive Officer, and Kevin Rubin is Chief Financial Officer. The company is based in San Jose, California. The pick is the common stock on Nasdaq (ZS), in US dollars.

## Thesis

The market prices Zscaler as a fast-growing software company that shows little GAAP profit and pays its staff with a lot of stock. In fiscal 2026 the GAAP net loss was $63.2 million, share-based compensation was $821.9 million, or about 24% of revenue, and free cash flow was $779.1 million, or 23% of revenue. Growth is set to slow: the outlook for fiscal 2027 is revenue growth of 16.6% to 17.5%, against 25% in fiscal 2026, and Red Canary, bought on August 1, 2025, is now in the base, so it no longer adds to growth. Capital spending also rose, and free cash flow was only 7% of revenue in Q4 2026. For the price to rise, ARR must grow at or above the outlook of 16.6% to 17.4%, the free cash flow margin must stay near 23%, and the share count must grow slowly: the company expects about 173 million diluted shares in fiscal 2027, against 163.1 million outstanding in August 2026. The Q1 fiscal 2027 report in late 2026 and the fiscal 2027 results in September 2027 are the dated tests. If growth holds near the outlook and stock pay falls against revenue, the gap can close within about two years. If growth slows faster than the outlook, the gap could last longer.

## Checkpoints

- Nov 24, 2026 (estimate): Q1 fiscal 2027 results: revenue and ARR. Status: Pending. Watch: Q1 revenue of $935 million or more and non-GAAP earnings per share of $1.15 or more pass; lower figures fail.
- Sep 2027 (estimate): Fiscal 2027 results: ARR and free cash flow. Status: Pending. Watch: ARR of $4.396 billion or more and a free cash flow margin of 23% or more pass; lower figures fail.

## Balance sheet

At July 31, 2026, Zscaler had cash and cash equivalents of $928.4 million and short-term investments of $2,545.8 million, which is $3,474.2 million in total. Its only debt was $1,725 million in principal of 0.0% convertible senior notes due July 15, 2028, with a carrying value of $1,696.4 million. Holders can convert before April 15, 2028 only under set conditions, which were not met in Q4 fiscal 2026. Deferred revenue was $2,926 million in total ($2,480.5 million current and $445.3 million non-current). Total liabilities were $5,268.5 million. Zscaler had 163,054,698 shares outstanding at August 27, 2026. All amounts are in US dollars.

As of 2026-07-31.

Sources:

- https://www.sec.gov/Archives/edgar/data/1713683/000171368326000157/zs-20260731.htm
- https://www.sec.gov/Archives/edgar/data/1713683/000171368326000156/zs-07312026_991.htm

## Dividends

Zscaler does not pay a dividend.

Source: company filings and market data, read on 2026-11-13.

## Recent events

- 2026-10-06: Zscaler held an investor presentation on its strategy, platform and growth drivers. In a press release it reaffirmed its outlook for Q1 and for fiscal 2027.
- 2026-09-24: Zscaler said that Ross Tackett becomes Chief Revenue Officer on October 1, 2026. He replaces Mike Rich, who steps down as an officer and stays as an adviser to December 31, 2026.
- 2026-09-03: Zscaler reported results for Q4 and fiscal 2026. Q4 revenue was $898.2 million, up 25%, ARR was $3,771 million, and non-GAAP operating margin was a record 24%. It gave an outlook for fiscal 2027 of revenue of $3.908 billion to $3.938 billion and ARR of $4.396 billion to $4.426 billion.
- 2026-09-01: Zscaler committed to a plan to cut its worldwide headcount by about 3%. It expects non-recurring charges of $30.0 million to $33.0 million, mostly for severance, and expects to book most of them in the first half of fiscal 2027.

## Latest news and filings

- Last earnings: 2026-09-03 (8-K: https://www.sec.gov/Archives/edgar/data/1713683/000171368326000156/)
- Next earnings: 2026-11-24 (expected; the company has not confirmed it)

| Filed | Form | Headline | Period end | XBRL document | Link |
| --- | --- | --- | --- | --- | --- |
| 2026-10-06 | 8-K | Investor disclosure |  | zs-20261006 | https://www.sec.gov/Archives/edgar/data/1713683/000171368326000200/zs-20261006.htm |
| 2026-09-24 | 8-K | Change of directors or officers |  | zs-20260924 | https://www.sec.gov/Archives/edgar/data/1713683/000171368326000193/zs-20260924.htm |
| 2026-09-03 | 10-K | Annual report for the period ended Jul 31, 2026 | 2026-07-31 | zs-20260731 | https://www.sec.gov/Archives/edgar/data/1713683/000171368326000157/zs-20260731.htm |
| 2026-09-03 | 8-K | Earnings release and Exit or restructuring costs |  | zs-20260901 | https://www.sec.gov/Archives/edgar/data/1713683/000171368326000156/ |
| 2026-05-26 | 10-Q | Quarterly report for the period ended Apr 30, 2026 | 2026-04-30 | zs-20260430 | https://www.sec.gov/Archives/edgar/data/1713683/000171368326000096/zs-20260430.htm |
| 2026-05-26 | 8-K | Earnings release |  | zs-20260526 | https://www.sec.gov/Archives/edgar/data/1713683/000171368326000095/ |
| 2026-04-16 | 8-K | Change of directors or officers |  | zs-20260415 | https://www.sec.gov/Archives/edgar/data/1713683/000171368326000082/zs-20260415.htm |
| 2026-02-26 | 10-Q | Quarterly report for the period ended Jan 31, 2026 | 2026-01-31 | zs-20260131 | https://www.sec.gov/Archives/edgar/data/1713683/000171368326000048/zs-20260131.htm |
| 2026-02-26 | 8-K | Earnings release |  | zs-20260226 | https://www.sec.gov/Archives/edgar/data/1713683/000171368326000047/ |
| 2026-01-15 | 8-K | Shareholder vote results |  | zs-20260112 | https://www.sec.gov/Archives/edgar/data/1713683/000171368326000031/zs-20260112.htm |

Every filing on SEC EDGAR (CIK 1713683): https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001713683&type=&dateb=&owner=include&count=40

## Risks

- High: Competition. Zscaler competes with legacy appliance vendors and with many other security vendors, some of which add AI to compete with its platform. A rival with a better product or a lower price could slow growth.
- Medium: Slower growth. The outlook for fiscal 2027 has revenue growth of 16.6% to 17.5%, against 25% in fiscal 2026. The company sells at a high price for growth, so a miss can hurt the price.
- Medium: Stock pay. Share-based compensation was $821.9 million in fiscal 2026. The GAAP loss from operations was $133.3 million. Shares outstanding rose to 163.1 million from 158.3 million a year earlier.
- Medium: Capital spending. Spending on property and software for internal use was $218.5 million in Q4 2026, against $78.7 million in Q4 2025, and free cash flow fell to 7% of revenue in the quarter.
- Medium: Sales team changes. A new Chief Revenue Officer starts on October 1, 2026, and the company is cutting about 3% of its staff. These changes can disrupt sales.
- Low: Convertible notes. Zscaler owes $1,725 million of 0.0% notes due July 15, 2028. On conversion, Zscaler must pay the principal in cash unless it elects to deliver only shares, and it has $3,474.2 million of cash and investments.

## Links

- Page: https://picks.utilarium.app/company/ZS/
- History of changes: https://picks.utilarium.app/company/ZS/history/
- JSON with full history: https://picks.utilarium.app/data/company/ZS.json

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