Zscaler, Inc. (ZS)
Quantitative Summary
DeterministicFinancial health is average: Piotroski 4/9, Altman Z 3.1. DCF fair value of $144 suggests 17% upside based on model assumptions.
Generated deterministically from quant metrics and financial statements. Not a recommendation.
Algorithmic Teardown
AI-GeneratedThe fundamental economics of Zscaler, Inc. reveal a classic high-growth technology profile currently constrained by negative earnings quality metrics. Despite robust revenue expansion at 23.3% year-over-year and an impressive gross margin of 76.9%, the company's return on invested capital stands at -0.3%, signaling that current growth is not yet translating into efficient value creation relative to deployed capital. This inefficiency drives a negative DuPont ROE of -2.3%, where weak net margins (-1.6%) are partially offset by moderate asset turnover (0.42x) and leverage (Equity Multiplier 3.57x). While the Beneish M-Score of -3.00 suggests low earnings manipulation risk, the Piotroski F-Score of 4/9 indicates a mixed financial health profile typical of scaling firms prioritizing expansion over immediate profitability.
Valuation metrics present a dichotomy between historical multiples and intrinsic value models. The stock trades at significant premiums relative to its sector average P/E of 57.8x, reflecting market pricing for future cash flow generation rather than current earnings power. However, discounted cash flow analysis suggests a fair value of $167, implying an 18.7% upside based on assumed long-term free cash flow growth rates of 12.4%. This valuation gap highlights that the market is currently discounting near-term losses heavily while anticipating substantial future operational efficiency gains to justify the current multiple structure.
Risk factor analysis underscores a divergence between fundamental performance and risk-adjusted returns over time. The annual Fama-French alpha of -12.37% indicates the stock has underperformed its benchmark when adjusted for market, size, and value factors, while a Value Factor (HML) score of -0.384 confirms a distinct growth tilt that may limit downside protection during mean reversion periods. Furthermore, recent insider activity shows $2,533,366 in net selling over the last 90 days, which could signal management caution regarding current valuations or liquidity needs despite the positive long-term DCF outlook.
Generated by LLM from quantitative data inputs. May contain inaccuracies. Not investment advice.
DCF Sandbox
Interactive5-year two-stage DCF. Terminal growth 3%. Default sliders match the pre-computed base case. Drag to explore scenarios. Not investment advice.
The growth rate the market implicitly expects over the next 10 years to justify today's price. Compare with historical growth of 23% YoY revenue.
Sensitivity Matrix
| TG ↓ / WACC → | 9.1% | 11.1% | 13.1% |
|---|---|---|---|
| 2% | $171 | $131 | $106 |
| 3% | $194 | $144 | $113 |
| 4% | $226 | $160 | $123 |
Center = base case. Green = >10% upside, Red = >10% downside vs $144.15.
Pre-computed DCF: WACC=11.1%, terminal growth 3%. Fair value $144 (+17.1%). Not investment advice.
Price Chart with Moving Averages
Quant Health Deep Dive
Profitability & Value Creation
DuPont Analysis — ROE Decomposition
Breaking down Return on Equity to see how the company generates its ROE — efficiency, margins, or leverage.
Balance Sheet Health
Insider Activity (Last 90 Days)
Open-market buys vs sells by company insiders. Source: yfinance.
Earnings Surprise History
EPS estimates vs actuals for the most recent reported quarters. Source: yfinance.
Risk Profile
Sharpe = risk-adjusted return (higher is better). Max drawdown = largest peak-to-trough decline. 1,200+ trading days.
Underwater (Drawdown from Peak)
How far below the all-time high the price has been over time. Deeper = more pain for holders.
Rolling 60-Day Beta vs S&P 500 (VOO)
How the stock's sensitivity to market moves changes over time. β > 1 = more volatile than the market.
Fama-French 5-Factor Exposure
Academic factor model decomposition — what's really driving this stock's returns.
Fama-French 5-Factor Model. Data: Kenneth French Data Library. Regression over 3 years of daily returns.
Fundamentals
Passive Flow Attribution
ETF Draft EffectWhen investors buy or sell ETFs like HACK or XSW, the fund manager is mechanically forced to buy or sell ZS shares regardless of Zscaler, Inc.'s individual fundamentals. We estimate $894M of passive capital is structurally linked to ZS through 8 tracked ETFs. Passive flows have a limited but growing influence on ZS's daily trading dynamics.
Passive exposure = Σ (ETF AUM × stock weight in ETF) across 8 tracked ETFs. Actual passive ownership is larger (includes mutual funds). Not investment advice.
ETF Contagion Visualizer
Simulate a price drop in Zscaler, Inc. to visualize passive redemption contagion across ETFs and collateral stocks.
If Zscaler, Inc. (ZS) experiences a significant drawdown, ETF redemptions can create collateral selling pressure on co-held stocks. Our model identifies Broadcom Inc (AVGO) as the most exposed collateral stock, sharing 1 ETFs with ZS. This is the "Passive Contagion" effect described in the Inelastic Market Hypothesis.
Contagion model based on shared ETF exposure and constituent weights across 11 tracked ETFs. Estimated selling pressure is a simplified model — actual impact depends on market liquidity, ETF redemption mechanics, and market-maker activity.
ZS Ownership Dynamics
Passive funds hold 1 in every 15 ZS shares, reducing daily market volatility.
Zscaler, Inc. (ZS) exerts measurable gravity on the passive index market, currently representing 4.1% of the Amplify Cybersecurity ETF (HACK) and 0.8% of the XSW (XSW). Across 13 tracked ETFs, approximately 11M shares (6.5% of float) are held by passive funds and rarely trade on the open market. As passive ownership grows, index inclusion changes may increasingly drive price discovery.
ETFs with Highest ZS Exposure
Float lock-up computed from 13 ETFs tracked by SecuritiesDB. Actual passive ownership is higher (includes mutual funds, pension funds, etc.).
ZS Institutional Volume Profile
252-day volume distribution by price level. The Point of Control (POC) marks — the price where the most institutional volume transacted — an implicit support/resistance floor.
The highest-volume price zone for Zscaler, Inc. over the past year sits near $131.30 (12% of 252-day volume). The current price of $144.15 trades 9.8% above this institutional floor — a sign of upside momentum, though a pullback to the POC zone is a common reversion target. The highly concentrated volume profile (12% at POC) indicates strong consensus on fair value — institutional participants have repeatedly transacted near this price.
Volume Profile computed from 252 trading days of OHLCV data. Volume allocated to price bins proportionally based on daily high-low range. Not investment advice.
ZS Capital Efficiency
How efficiently does Zscaler, Inc. convert operating profits into free cash? The FCF Conversion ratio measures the gap between accounting earnings and real cash generation.
Zscaler, Inc. converts 672% of its EBITDA into free cash flow, an exceptional conversion rate indicating an asset-light business model with minimal capital reinvestment drag. However, the ROIC-WACC spread is negative (-11.3%), suggesting reinvested capital is destroying shareholder value.
Capital efficiency = Free Cash Flow ÷ EBITDA. Reinvestment = (EBITDA − FCF) ÷ EBITDA. Metrics from latest annual filings. Not investment advice.
Fails-to-Deliver (FTD) History
SEC-reported settlement failures. Elevated FTDs can indicate high short-selling pressure, operational settlement issues, or naked shorting activity.
| Date | Failed Shares | Close Price | Notional Value |
|---|---|---|---|
| 2026-05-11 | 215 | $152.13 | $32,707.95 |
| 2026-05-06 | 4 | $141.36 | $565.44 |
| 2026-05-05 | 34 | $142.20 | $4,834.8 |
| 2026-05-04 | 1,059 | $139.81 | $148,058.79 |
| 2026-05-01 | 3,073 | $130.68 | $401,579.64 |
| 2026-04-30 | 433 | $134.73 | $58,338.09 |
| 2026-04-29 | 69 | $136.07 | $9,388.83 |
| 2026-04-28 | 73 | $134.11 | $9,790.03 |
| 2026-04-27 | 69 | $135.50 | $9,349.5 |
| 2026-04-24 | 1,203 | $132.97 | $159,962.91 |
| 2026-04-17 | 506 | $134.33 | $67,970.98 |
| 2026-04-14 | 8 | $122.62 | $980.96 |
| 2026-04-07 | 3,397 | $139.52 | $473,949.44 |
| 2026-04-02 | 10 | $136.67 | $1,366.7 |
| 2026-03-31 | 3,177 | $137.26 | $436,075.02 |
| 2026-03-30 | 5 | $133.16 | $665.8 |
| 2026-03-27 | 364 | $141.50 | $51,506 |
| 2026-03-26 | 7 | $139.44 | $976.08 |
| 2026-03-25 | 5,087 | $139.41 | $709,178.67 |
| 2026-03-23 | 13,973 | $151.47 | $2.1M |
| 2026-03-20 | 6 | $155.40 | $932.4 |
| 2026-03-18 | 60,920 | $156.00 | $9.5M |
| 2026-03-17 | 585 | $153.69 | $89,908.65 |
| 2026-03-16 | 1,464 | $153.76 | $225,104.64 |
| 2026-03-12 | 1,960 | $153.81 | $301,467.6 |
| 2026-03-04 | 818 | $154.67 | $126,520.06 |
| 2026-02-24 | 205,498 | $143.28 | $29.4M |
| 2026-02-20 | 9 | $168.99 | $1,520.91 |
| 2026-02-18 | 26 | $172.59 | $4,487.34 |
| 2026-01-28 | 9 | $219.67 | $1,977.03 |
Source: SEC Regulation SHO FTD data. Data is reported with a ~30 day delay. High FTD quantities relative to average daily volume may indicate settlement stress.
Price Correlations
Statistical correlation of daily returns with other stocks. High correlations indicate stocks that move together; negative correlations can offer diversification.
| Peer | 252-Day (1Y) | 126-Day (6M) | Direction |
|---|---|---|---|
| WTGXX | NaN | NaN | |
| CRWD | 0.737 | 0.765 | High co-movement |
| PANW | 0.627 | 0.629 | Moderate |
| NOW | 0.608 | 0.636 | Moderate |
| TENB | 0.593 | 0.642 | Moderate |
| SNOW | 0.590 | 0.625 | Moderate |
| NET | 0.577 | 0.571 | Moderate |
| OKTA | 0.576 | 0.655 | Moderate |
| RBRK | 0.569 | 0.572 | Moderate |
| WDAY | 0.562 | 0.664 | Moderate |
Pearson correlation of daily log returns. 252d ≈ 1 trading year. Computed from price history. Not investment advice.
Compare ZS to Peers
Quant metrics computed deterministically from financial statements and price data. Updated: 2026-06-02.
SecuritiesDB provides programmatic data aggregation for informational purposes only. None of the metrics, summaries, or algorithmic flags constitute a recommendation to buy or sell any security.