Research Idea
Research content for general circulation. Not individualized advice. Methodology & Disclosures
Legitimate momentum setup with Q2 revenue up 26% YoY, ARR up 25%, raised FY26 guidance, RPO up 31% to $6.1B, record large-deal activity, and the stock up about 26% over 21 trading days.
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AI Analyst Overview
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Valuation Metrics
Fundamental Analysis
Key Financial Insights: ⢠Strong Cash Generation ⢠Persistent Net Losses ⢠Dilution And Leverage ZS combines strong margins, robust cash generation, and substantial deferred revenue with ongoing losses, dilution, leverage, and elevated valuation risk.
Price Behavior
Key Price Behavior Insights: ⢠Higher Highs ⢠Support Rebound ⢠Resistance Holds Support Level: $174.95; stronger support at $168.68â$162.60 Resistance Level: $184.60â$188.18 ZS remains bullish over the last month, with higher highs and lows and a rebound from $174.95, but resistance at $184.60â$188.18 and elevated volatility warrant caution.
Sentiment & News
Key News Insights: ⢠Strong demand ⢠Rising costs ⢠Volatile valuation Zscaler shows strong enterprise and AI-security momentum but faces rising infrastructure costs, weaker free-cash-flow guidance, valuation concerns, and volatile trading.
AI Summary
Zscaler's platform expansion into AI, data, and branch security offers meaningful wallet-share upside, but decelerating growth, rising infrastructure costs, sales turnover, and dilution make the investment hinge on improving net-new ARR and sustaining free-cash-flow margins above 20%.
Description
Zscaler, Inc. is a San Joseâbased provider of cloud-native security services that deliver secure connectivity for users, devices and workloads to both external and internal applications. Its offerings include secure internet and private access, tools for measuring digital experience, and cloud workload and posture controls designed to reduce misconfiguration, limit lateral threat movement and support compliance. The company serves enterprise clients across industries such as financial services, healthcare, retail, technology and the public sector and was incorporated in 2007 (renamed Zscaler in 2008).
Idea History
| Date | Close | Ticker | Company | Summary | Status | P/L |
|---|---|---|---|---|---|---|
| May 19 | May 26 | ZS | Zscaler, Inc. | Legitimate momentum setup with Q2 revenue up 26% YoY, ARR up 25%, raised FY26 guidance, RPO up 31% to $6.1B, record large-deal activity, and the stock up about 26% over 21 trading days. | Closed | +5.2% |