{"id":513555,"date":"2026-06-27T10:08:10","date_gmt":"2026-06-27T10:08:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/513555\/"},"modified":"2026-06-27T10:08:10","modified_gmt":"2026-06-27T10:08:10","slug":"zscaler-zs-stock-after-40-ytd-slide-are-valuation-models-pointing-higher","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/513555\/","title":{"rendered":"Zscaler (ZS) Stock After 40% YTD Slide Are Valuation Models Pointing Higher"},"content":{"rendered":"\n

Find winning stocks<\/a> in any market cycle. Join 7 million investors using Simply Wall St’s investing ideas for FREE. <\/p>\n

If you are wondering whether Zscaler stock is starting to offer value or still carries a premium, it helps to line up the recent share price performance against a clear set of valuation checks. <\/p>\n

The stock last closed at US$132.26, with returns of 5.9% over the past week and 4.6% over the past month, while the year to date return has declined 40.0% and the one year return has declined 58.1%. <\/p>\n

These moves sit against a backdrop where investors have been closely watching how cybersecurity demand and spending patterns affect companies like Zscaler, and how that feeds into expectations for future growth and risk. Recent commentary across the sector has focused on how businesses prioritize security solutions, which can influence sentiment around stocks in this group. <\/p>\n

In that context, Zscaler currently has a valuation score of 5 out of 6<\/a>, reflecting how it screens across several different valuation checks. The rest of this article will walk through those approaches and then finish with a broader framework for thinking about what valuation really means for long term investors. <\/p>\n

Find out why Zscaler’s -58.1% return over the last year is lagging behind its peers.<\/a> <\/p>\n

Approach 1: Zscaler Discounted Cash Flow (DCF) Analysis <\/p>\n

A Discounted Cash Flow, or DCF, model estimates what a stock could be worth by projecting the company’s future cash flows and then discounting those back to today’s value. For Zscaler, the model used is a 2 Stage Free Cash Flow to Equity approach, which looks at near term forecasts and then a second stage of extrapolated cash flows. <\/p>\n

Zscaler’s latest twelve month Free Cash Flow is reported at $852.30 million. Analyst and extrapolated projections provided to Simply Wall St point to Free Cash Flow figures through 2035, with the 2030 estimate at $1,755.13 million. These yearly projections, all in $, are discounted back to today using the model’s required return assumptions and then aggregated to arrive at an estimated equity value per share. <\/p>\n

On this basis, the DCF model suggests an intrinsic value of about $205.95 per share. Compared with the recent share price of $132.26, this implies that Zscaler stock screens as 35.8% undervalued under these assumptions. <\/p>\n

Result: UNDERVALUED <\/p>\n

Our Discounted Cash Flow (DCF) analysis suggests Zscaler is undervalued by 35.8%. Track this in your watchlist<\/a> or portfolio<\/a>, or discover 44 more high quality undervalued stocks<\/a>. <\/p>\n

\"ZS<\/a> ZS Discounted Cash Flow as at Jun 2026 <\/p>\n

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Zscaler.<\/a> <\/p>\n

Story Continues <\/p>\n

Approach 2: Zscaler Price vs Sales <\/p>\n

For a company like Zscaler, where investors often focus on revenue instead of earnings, the P\/S ratio is a useful way to think about what the market is paying for each dollar of sales. The level of P\/S investors are comfortable with usually reflects expectations for future growth as well as perceived risk, with higher growth or lower risk often supporting a higher multiple. <\/p>\n

Zscaler currently trades on a P\/S ratio of 6.74x. That sits above the broader Software industry average P\/S of 3.25x, while the peer group referenced here carries an average P\/S of 9.28x. <\/p>\n

Simply Wall St’s Fair Ratio for Zscaler is 8.18x. This is a proprietary estimate of what a more tailored P\/S might look like after weighing factors such as revenue growth, profit margins, industry, market cap and company specific risks. Because it is based on company characteristics rather than simple comparisons, the Fair Ratio can provide a more nuanced anchor than using industry or peer averages alone. <\/p>\n

Comparing the Fair Ratio of 8.18x with the current P\/S of 6.74x suggests Zscaler stock may be trading at a discount on this measure. <\/p>\n

Result: UNDERVALUED <\/p>\n

\"NasdaqGS:ZS<\/a> NasdaqGS:ZS P\/S Ratio as at Jun 2026 <\/p>\n

P\/S ratios tell one story, but what if the real opportunity lies elsewhere? Start investing in legacies, not executives. Discover our 20 top founder-led companies<\/a>. <\/p>\n

Upgrade Your Decision Making: Choose your Zscaler Narrative <\/p>\n

Earlier it was mentioned that there is an even better way to think about valuation. Narratives step in as your way to attach a clear story about Zscaler to the numbers you are seeing, by spelling out what you believe about its future revenue, earnings and margins. You can then link that story directly to a financial forecast and a Fair Value that can be compared with the current share price to help you decide whether the stock looks attractive or expensive. <\/p>\n

On Simply Wall St, Narratives live in the Community page and are designed to be quick to scan and easy to use. This allows you to see how different views stack up without building your own spreadsheet, and they refresh automatically when new data such as earnings or news is incorporated. <\/p>\n

For Zscaler, one investor might lean toward a higher Fair Value closer to about US$246 per share based on assumptions similar to the more optimistic cohort. Another might anchor around roughly US$228 or US$238 using more cautious assumptions. By seeing these Narratives side by side, you can decide which story aligns more closely with your own expectations before comparing each Fair Value to today’s price. <\/p>\n

Do you think there’s more to the story for Zscaler? Head over to our Community to see what others are saying!<\/a> <\/p>\n

\"NasdaqGS:ZS<\/a> NasdaqGS:ZS 1-Year Stock Price Chart <\/p>\n

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. <\/p>\n

Companies discussed in this article include ZS<\/a>. <\/p>\n

Have feedback on this article? Concerned about the content? Get in touch<\/a> with us directly. Alternatively, email editorial-team@simplywallst.com<\/a> <\/p>\n","protected":false},"excerpt":{"rendered":"Find winning stocks in any market cycle. Join 7 million investors using Simply Wall St’s investing ideas for…\n","protected":false},"author":2,"featured_media":513556,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[114,65019,56544,85,46,13132,73161],"class_list":["post-513555","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-business","tag-dcf","tag-free-cash-flow","tag-il","tag-israel","tag-share-price","tag-zscaler"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/513555","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=513555"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/513555\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/513556"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=513555"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=513555"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=513555"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}