Stock

Zscaler

ZS
37
Software - Infrastructure · Technology
Also trades as: 0XVU.L GBP 2.07 (-4.94%)
Price
$207.38
-13.05 (-5.92%)
Market Cap
$33.81B
Exchange
NASDAQ
Winston Score
37
Winston is serious
Below-average fundamentals — multiple weak pillars.
Data as of Oct 18, 2026 · filings through Jul 31, 2026

§How the score breaks down

Quality
Mixed
10/30
Growth
Mixed
8/20
Cash Flow
Mixed
4/10
Stability
Mixed
3/10
Valuation
Data not available
0/10
Ownership
Good
10/15
Dividends
Not counted
n/a

35 of 95 counted points = Winston Score 37. Pillars marked n/a do not apply to this company and are left out of the total.

Share count rising — dilution

+13.7% over 4y

The company has issued more shares over this period, which dilutes each existing shareholder’s stake.

Diluted shares outstanding: 140.9M (2022) → 160.2M (2026)

§Winston Score History

The full picture

Zscaler is a cybersecurity company that protects businesses from online threats by acting like a security checkpoint in the cloud. Instead of using traditional hardware firewalls, companies connect their employees and systems through Zscaler's cloud platform, which checks all internet traffic for dangers. Its main customers are large enterprises and government agencies that need to keep their data and networks safe.

Zscaler makes money by charging businesses a recurring subscription fee to use its cloud security services. It operates globally, with strong adoption in North America, Europe, and Asia-Pacific, and generates over $2 billion in annual revenue. Its competitive advantage comes from its large cloud network, which processes billions of transactions daily and gets smarter as more customers use it — a classic network effect. The key growth driver is the ongoing shift away from old-style network security toward cloud-based "zero trust" security models, though Zscaler faces growing competition from larger tech companies like Microsoft and Palo Alto Networks.

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Growth Profile

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+24.9% YoY

YoY Growth Rate

Steady revenue growth

EPS Growth

+81.8% YoY

YoY Growth Rate

EPS growth accelerating

R&D Spend

$903M/ year

↑ Rising (+34% vs prior year)

26.9% of revenue

1.8x the sector average (15%)

Investing heavily in future products and technology

Insider Activity

35.2%ownership

→ Flat

Insider ownership roughly steady over the past year

Cash Position

Cash flow positive

$3.5B cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Heavy R&D investment

Zscaler is putting 27% of revenue into R&D and that number is rising. That's 1.8x the sector average. And they're generating enough cash to self-fund it.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

Each metric is explained in plain language so you know exactly what you're looking at. Start your free trial now.

Quality

Profit per sale
Gross Margin
76.7%
Premium pricing power — 76.7% gross margin
Profit after running costs
Operating Margin
-1.7%
Losing money on operations — -1.7%
Return on the money invested
ROCE
-3.0%
Weak — -3.0% return on capital

Negative ROIC means the business is losing money on every dollar invested in it.

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Growth

Sales growth
Sales YoY
+25.4%
Fast-growing sales (+25.4% YoY)
Profit growth
EPS YoY
N/A
Data not available
How steady the profit is
EPS Consistency
4/8 quarters
Earnings inconsistent quarter-to-quarter

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Cash Flow

Profit that turns into cash
Cash Conversion
N/A
—
Data not available
Spare cash per sale
FCF Margin
29.8%
Converts sales into free cash efficiently (29.8%)

Free cash flow margin above 20%. Out of every $100 in sales, more than $20 is real cash they keep.

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Stability

What it owes vs what it owns
Debt / Equity
0.71
Moderate — manageable debt (0.71)
Covers its interest
Interest Cover
N/A
Data not available

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Valuation

Price vs profit
P/E Ratio (TTM)
N/A
—
Data not available
Cheaper or dearer next year
P/E vs Forward
N/A
not available
Data not available

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Dividends

Not applicable for this business.
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