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Zscaler ZS

Zscaler scores average on business quality (5.1 of 10). Here is why, in plain words, and what our sealed record shows.

Last price$233.73Oct 10, 2026
Business qualityAverage
Next earningsNov 23, 2026
Insiders, 90 daysSelling

Why it matters

  1. What Zscaler does

    Zscaler sells cloud-native security services, charging enterprises subscriptions to route and protect user traffic without traditional corporate firewalls.

  2. What it does best

    Zscaler delivers an inline cloud security architecture that processes massive traffic volumes with a gross margin of 76.8%, outperforming peers like PANW at 70.4%. This multi-tenant cloud edge creates massive scale advantages that legacy perimeter vendors cannot easily replicate.

  3. The main risk

    A negative operating margin of -3.7% combined with negative return on equity of -2.8% leaves zero margin for execution errors if enterprise software budgets suddenly tighten.

Quality, check by check

Scored against its own industry, from company filings.

ProfitabilityWeak

Operating margins sit at -3.7% while free cash flow margin hits a healthy 59.0% sector rank, driven by strong collections despite ongoing GAAP net losses of $63M.

MoatWeak

Enterprise switching costs form the primary moat, locking in large corporate customers inside the top quartile of sector gross margins at 76.8% and sector growth rank of 80.

GrowthFast

Revenue surged to $3.3B, representing a 25.4% growth rate that continues a rapid multi-year expansion from $673M in 2021, though the rate is stabilizing.

Financial healthWeak

Holding $3.4B in cash against $1.7B in debt provides a net cash position of $1.8B, while free cash flow reaches $779M: keeping balance-sheet risk low despite negative net income.

Insiders

Executives and directors, from SEC Form 4 filings we read ourselves. Open market trades only; grants, option exercises and pre-planned sales left out.

4 sold $2.9M outside pre-planned sales.

Our sealed record on ZS

Verdicts appear here 30 days after we publish them; members see today's. Each one is in the nightly ledger, fingerprinted the night it was made.

The first sealed verdicts appear here on Oct 11, 2026.

Questions

Is ZS a good business?

Zscaler scores average on the Cluenex quality check (5.1 of 10), measured against its own industry. Profitability is weak, moat weak, growth fast and financial health weak.

Are insiders buying ZS?

In the last 90 days of SEC Form 4 filings: 4 sold $2.9M outside pre-planned sales.

When does ZS report earnings?

Nov 23, 2026.

For members

See ZS today

  • Today's verdict on ZS, and why
  • Fair value with cautious, base and optimistic cases
  • The exact price that would change the verdict
  • Which stocks each signal names, the night it fires
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Cite this page: Cluenex, “Zscaler (ZS)”, https://cluenex.com/stocks/zs/, data as of Oct 10, 2026.