Recent News
On August 1, 2025 Zscaler announced completion of its acquisition of Red Canary to combine threat intelligence and agentic AI-driven security operations.
On August 20, 2025 Zscaler expanded the Red Canary partnership with CrowdStrike to integrate endpoint telemetry and accelerate AI-driven SOC workflows.
On October 14, 2025 coverage noted Zscaler’s stock pulled back after approaching a buy point, while the company reported continued ARR strength above $3 billion and provided guidance for fiscal 2026.
Technical Analysis
Directional indicators show a weak trend: ADX at 16.24 indicates no established trend, while DI+ at 24.00 completed a peak-and-reversal and DI- at 20.03 completed a dip-and-reversal, both signaling bearish directional pressure against the recent valuation and implying near-term downside bias.
MACD sits at 5.36 below its signal line at 5.74 with a peak-and-reversal in the MACD trend, reflecting falling bullish momentum and reinforcing the directional indicators’ bearish message for short-term price movement.
MRO at 34.22 reads positive, indicating price above modeled target and a likelihood of downward adjustment; the MRO trend shows a peak-and-reversal, which amplifies the downside potential relative to the current valuation level.
RSI at 54.16 near neutral completed a peak-and-reversal, implying momentum has rolled over from recent highs; momentum indicators together point to consolidation under short-term pressure rather than fresh breakout strength.
Price sits at $299.24 under the 20-day average of $304.82 and the 12-day EMA trend shows a peak-and-reversal, which biases the short-term price path lower; the close remains above the 50-day average ($285.91) and well above the 200-day average ($248.47), so medium- and longer-term structural support persists while immediate risk skews to the downside.
Bollinger bands place the 1σ upper near $312 and 1σ lower near $297, with the super trend lower at $294.39; the price trading inside the upper band region accompanied by below-average 10‑day volume suggests any pullback could find technical support near the $294–$297 area before retesting higher targets.
Volatility readings (42‑day and 52‑week) remain moderate and betas (42‑day 1.26, 52‑week 1.37) signal above-market sensitivity; lower short-term volume relative to 10‑ and 50‑day averages reduces conviction behind recent moves and increases the probability of mean reversion toward moving average support levels.
Fundamental Analysis
Profitability: Gross margin at 76.05% remains above the industry peer mean of 74.17% and median of 73.23%, supporting premium multiples; operating margin at -4.30% contrasts with the industry peer mean of 20.29% and median of 25.53%, reflecting continued investment into growth and product scale. EBIT stands at -$4,122,000 and EBITDA at $30,218,000, producing an EBIT margin of -0.57% versus the industry peer mean of 21.03% and median of 25.53%.
Growth: Reported revenue of $719,226,000 pairs with revenue growth quarter-over-quarter of 30.62% and revenue growth year-over-year of -15.27%; the QoQ acceleration suggests seasonal or timing effects while YoY contraction indicates a higher-comparison base or product mix shifts that require monitoring before assuming sustained topline expansion.
Cash, liquidity and leverage: Cash and short-term investments total $3,572,409,000 with cash alone at $2,389,023,000 and a current ratio of 2.01, indicating strong near-term liquidity. Total debt at $1,796,576,000 yields a debt-to-EBITDA of 59.45, reflecting leverage relative to current operating cash generation despite a net cash-like position on the balance sheet when including short-term investments.
Cash flow and efficiency: Free cash flow totaled $171,921,000 with a free cash flow yield of 0.39% (slightly above the industry peer mean of 0.37%), and operating cash flow of $250,604,000. Asset turnover at 0.122 compares slightly above the industry peer mean of 0.114, but receivables turnover at 0.895 lags the peer mean, producing a cash conversion cycle of 72.31 days versus a peer mean of 45.89 days.
Per‑share and multiples: EPS actual $0.89 beat the estimate $0.80 by $0.09, an EPS surprise ratio of 11.25%. Current P/E registers at 310.57x with P/B at 24.32x and P/S at 60.84x; those multiples sit above the industry peer mean and median ranges and drive the WMDST valuation conclusion. Enterprise multiple at 1,389 further signals extreme premium relative to operating scale.
Valuation Summary: WMDST values the stock as over-valued. High gross margins and a strong cash position mitigate some risk, but elevated multiples (P/E, P/S, P/B) combined with negative operating margins and elevated debt-to-EBITDA create valuation stress against the near-term technical setup.
MOST-RECENT QUARTERLY REPORT
| REPORT PERIOD ENDING: | 2025-07-31 |
| REPORT DATE: | 2025-09-02 |
| NEXT REPORT DATE: | 2025-12-01 |
| CASH FLOW | Begin Period Cash Flow | $ 2.0 B |
| Operating Cash Flow | $ 250.6 M | |
| Capital Expenditures | $ -78.68 M | |
| Change In Working Capital | $ -2.66 M | |
| Dividends Paid | — | |
| Cash Flow Delta | $ 398.1 M | |
| End Period Cash Flow | $ 2.4 B | |
| INCOME STATEMENT | REVENUE | |
| Total Revenue | $ 719.2 M | |
| Forward Revenue | $ -1.44 B | |
| COSTS | ||
| Cost Of Revenue | $ 172.2 M | |
| Depreciation | $ 30.3 M | |
| Depreciation and Amortization | $ 34.3 M | |
| Research and Development | $ 177.6 M | |
| Total Operating Expenses | $ 750.2 M | |
| PROFITABILITY | ||
| Gross Profit | $ 547.0 M | |
| EBITDA | $ 30.2 M | |
| EBIT | $ -4.12 M | |
| Operating Income | $ -30.93 M | |
| Interest Income | $ 33.2 M | |
| Interest Expense | $ -2.22 M | |
| Net Interest Income | $ 31.1 M | |
| Income Before Tax | $ -1.90 M | |
| Tax Provision | $ 15.7 M | |
| Tax Rate | 21.0 % | |
| Net Income | $ -17.58 M | |
| Net Income From Continuing Operations | $ -17.58 M | |
| EARNINGS | ||
| EPS Estimate | $ 0.80 | |
| EPS Actual | $ 0.89 | |
| EPS Difference | $ 0.09 | |
| EPS Surprise | 11.25 % | |
| Forward EPS | $ 0.89 | |
| BALANCE SHEET | ASSETS | |
| Total Assets | $ 6.4 B | |
| Intangible Assets | $ 465.1 M | |
| Net Tangible Assets | $ 1.3 B | |
| Total Current Assets | $ 4.9 B | |
| Cash and Short-Term Investments | $ 3.6 B | |
| Cash | $ 2.4 B | |
| Net Receivables | $ 992.2 M | |
| Inventory | — | |
| Long-Term Investments | $ 98.7 M | |
| LIABILITIES | ||
| Accounts Payable | $ 46.9 M | |
| Short-Term Debt | — | |
| Total Current Liabilities | $ 2.4 B | |
| Net Debt | — | |
| Total Debt | $ 1.8 B | |
| Total Liabilities | $ 4.6 B | |
| EQUITY | ||
| Total Equity | $ 1.8 B | |
| Retained Earnings | $ -1.19 B | |
| VALUATION & PER-SHARE METRICS | EQUITY & PER-SHARE METRICS | |
| Book Value Per-Share | $ 11.37 | |
| Shares Outstanding | 158.301 M | |
| Revenue Per-Share | $ 4.54 | |
| VALUATION | Market Capitalization | $ 43.8 B |
| Enterprise Value | $ 42.0 B | |
| Enterprise Multiple | 1389.219 | |
| Enterprise Multiple QoQ | 51.819 % | |
| Enterprise Multiple YoY | 16.456 % | |
| Enterprise Multiple IPRWA | ZS: 1389.219 high: 913.757 median: 119.829 mean: 102.398 low: -500.562 |
|
| EV/R | 58.367 | |
| CAPITAL STRUCTURE | ||
| Asset To Equity | 3.568 | |
| Asset To Liability | 1.389 | |
| Debt To Capital | 0.5 | |
| Debt To Assets | 0.28 | |
| Debt To Assets QoQ | 21.605 % | |
| Debt To Assets YoY | 15.269 % | |
| Debt To Assets IPRWA | high: 0.701 mean: 0.326 median: 0.314 ZS: 0.28 low: 0.005 |
|
| Debt To Equity | 0.999 | |
| Debt To Equity QoQ | 46.664 % | |
| Debt To Equity YoY | 11.374 % | |
| Debt To Equity IPRWA | high: 2.26 ZS: 0.999 mean: 0.382 median: 0.216 low: -0.716 |
|
| PRICE-BASED VALUATION | ||
| Price To Book (P/B) | 24.318 | |
| Price To Book QoQ | 27.469 % | |
| Price To Book YoY | 8.397 % | |
| Price To Book IPRWA | high: 29.644 ZS: 24.318 median: 23.159 mean: 18.245 low: -17.466 |
|
| Price To Earnings (P/E) | 310.568 | |
| Price To Earnings QoQ | 17.957 % | |
| Price To Earnings YoY | 45.801 % | |
| Price To Earnings IPRWA | high: 575.231 ZS: 310.568 mean: 177.99 median: 153.023 low: -214.856 |
|
| PE/G Ratio | 52.179 | |
| Price To Sales (P/S) | 60.837 | |
| Price To Sales QoQ | 19.791 % | |
| Price To Sales YoY | 26.183 % | |
| Price To Sales IPRWA | high: 95.267 ZS: 60.837 mean: 42.819 median: 42.816 low: 5.82 |
|
| FORWARD MULTIPLES | ||
| Forward P/E | 311.677 | |
| Forward PE/G | 52.365 | |
| Forward P/S | -30.361 | |
| EFFICIENCY | OPERATIONAL | |
| Operating Leverage | -26.852 | |
| ASSET & SALES | ||
| Asset Turnover Ratio | 0.122 | |
| Asset Turnover Ratio QoQ | -6.683 % | |
| Asset Turnover Ratio YoY | -8.147 % | |
| Asset Turnover Ratio IPRWA | high: 0.231 ZS: 0.122 mean: 0.114 median: 0.104 low: 0.048 |
|
| Receivables Turnover | 0.895 | |
| Receivables Turnover Ratio QoQ | -25.449 % | |
| Receivables Turnover Ratio YoY | -6.235 % | |
| Receivables Turnover Ratio IPRWA | high: 3.437 mean: 1.904 median: 1.716 ZS: 0.895 low: 0.56 |
|
| Inventory Turnover | — | |
| Inventory Turnover Ratio QoQ | — | |
| Inventory Turnover Ratio YoY | — | |
| Inventory Turnover Ratio IPRWA | — | |
| Days Sales Outstanding (DSO) | 102.003 | |
| CASH CYCLE | ||
| Cash Conversion Cycle Days (CCC) | 72.309 | |
| Cash Conversion Cycle Days QoQ | — | |
| Cash Conversion Cycle Days YoY | — | |
| Cash Conversion Cycle Days IPRWA | high: 90.931 ZS: 72.309 mean: 45.895 median: 44.35 low: -19.63 |
|
| CAPITAL DEPLOYMENT | ||
| Cash Conversion Ratio | 0.292 | |
| CapEx To Revenue | -0.109 | |
| CapEx To Depreciation | -2.6 | |
| CAPITAL, LIQUIDITY & COVERAGE | CAPITAL STRUCTURE | |
| Total Capital | $ 3.5 B | |
| Net Invested Capital | $ 3.5 B | |
| Invested Capital | $ 3.5 B | |
| Net Tangible Assets | $ 1.3 B | |
| Net Working Capital | $ 2.5 B | |
| LIQUIDITY | ||
| Cash Ratio | 1.47 | |
| Current Ratio | 2.014 | |
| Current Ratio QoQ | 63.01 % | |
| Current Ratio YoY | 84.615 % | |
| Current Ratio IPRWA | high: 5.697 ZS: 2.014 mean: 1.127 median: 0.942 low: 0.436 |
|
| Quick Ratio | — | |
| Quick Ratio QoQ | — | |
| Quick Ratio YoY | — | |
| Quick Ratio IPRWA | — | |
| COVERAGE & LEVERAGE | ||
| Debt To EBITDA | 59.454 | |
| Cost Of Debt | -0.116 % | |
| Interest Coverage Ratio | 1.858 | |
| Interest Coverage Ratio QoQ | -61.392 % | |
| Interest Coverage Ratio YoY | -546.321 % | |
| Interest Coverage Ratio IPRWA | high: 93.343 mean: 9.384 median: 4.713 ZS: 1.858 low: -28.274 |
|
| Operating Cash Flow Ratio | -0.151 | |
| TIMING / LIQUIDITY | ||
| Days Payables Outstanding (DPO) | 29.694 | |
| DIVIDENDS | ||
| Dividend Coverage Ratio | — | |
| Dividend Payout Ratio | — | |
| Dividend Rate | — | |
| Dividend Yield | — | |
| PERFORMANCE | GROWTH | |
| Asset Growth Rate | 20.231 % | |
| Revenue Growth | 6.075 % | |
| Revenue Growth QoQ | 30.617 % | |
| Revenue Growth YoY | -15.272 % | |
| Revenue Growth IPRWA | high: 11.139 % ZS: 6.075 % median: 3.01 % mean: 1.293 % low: -6.143 % |
|
| Earnings Growth | 5.952 % | |
| Earnings Growth QoQ | -22.621 % | |
| Earnings Growth YoY | — | |
| Earnings Growth IPRWA | high: 114.286 % ZS: 5.952 % median: 4.941 % mean: 3.151 % low: -13.529 % |
|
| MARGINS | ||
| Gross Margin | 76.052 % | |
| Gross Margin QoQ | -1.226 % | |
| Gross Margin YoY | -2.545 % | |
| Gross Margin IPRWA | high: 90.981 % ZS: 76.052 % mean: 74.167 % median: 73.229 % low: 59.218 % |
|
| EBIT Margin | -0.573 % | |
| EBIT Margin QoQ | -159.502 % | |
| EBIT Margin YoY | 126.482 % | |
| EBIT Margin IPRWA | high: 37.642 % median: 25.525 % mean: 21.029 % ZS: -0.573 % low: -41.293 % |
|
| Return On Sales (ROS) | -4.3 % | |
| Return On Sales QoQ | -546.521 % | |
| Return On Sales YoY | 1599.605 % | |
| Return On Sales IPRWA | high: 36.289 % median: 25.525 % mean: 20.288 % ZS: -4.3 % low: -44.13 % |
|
| CASH FLOW | ||
| Free Cash Flow (FCF) | $ 171.9 M | |
| Free Cash Flow Yield | 0.393 % | |
| Free Cash Flow Yield QoQ | 13.256 % | |
| Free Cash Flow Yield YoY | -17.61 % | |
| Free Cash Flow Yield IPRWA | high: 2.218 % ZS: 0.393 % mean: 0.373 % median: 0.246 % low: -1.333 % |
|
| Free Cash Growth | 43.912 % | |
| Free Cash Growth QoQ | -362.804 % | |
| Free Cash Growth YoY | 309.856 % | |
| Free Cash Growth IPRWA | high: 259.959 % ZS: 43.912 % mean: -35.077 % median: -87.615 % low: -108.458 % |
|
| Free Cash To Net Income | -9.78 | |
| Cash Flow Margin | -51.074 % | |
| Cash Flow To Earnings | 20.897 | |
| VALUE & RETURNS | ||
| Economic Value Added | $ 0.04 | |
| Return On Assets (ROA) | -0.299 % | |
| Return On Assets QoQ | 273.75 % | |
| Return On Assets YoY | -10.479 % | |
| Return On Assets IPRWA | high: 6.233 % median: 1.678 % mean: 1.591 % ZS: -0.299 % low: -9.564 % |
|
| Return On Capital Employed (ROCE) | -0.103 % | |
| Return On Equity (ROE) | -0.01 | |
| Return On Equity QoQ | 326.638 % | |
| Return On Equity YoY | -16.353 % | |
| Return On Equity IPRWA | high: 0.151 median: 0.115 mean: 0.065 ZS: -0.01 low: -0.192 |
|
| DuPont ROE | -0.975 % | |
| Return On Invested Capital (ROIC) | -0.093 % | |
| Return On Invested Capital QoQ | -70.192 % | |
| Return On Invested Capital YoY | -198.936 % | |
| Return On Invested Capital IPRWA | high: 10.16 % median: 3.218 % mean: 3.048 % ZS: -0.093 % low: -12.344 % |
|