Head to Head Review: Zscaler (ZS) and The Competition

Zscaler (NASDAQ: ZS) is one of 38 publicly-traded companies in the “Custom computer programming services” industry, but how does it weigh in compared to its peers? We will compare Zscaler to related companies based on the strength of its risk, earnings, valuation, analyst recommendations, institutional ownership, profitability and dividends.

Profitability

This table compares Zscaler and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Zscaler N/A N/A N/A
Zscaler Competitors 1.15% 97.74% 4.71%

Institutional and Insider Ownership

23.0% of Zscaler shares are owned by institutional investors. Comparatively, 59.0% of shares of all “Custom computer programming services” companies are owned by institutional investors. 11.7% of shares of all “Custom computer programming services” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Zscaler and its peers top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Zscaler $190.17 million -$33.64 million -117.26
Zscaler Competitors $2.00 billion $177.09 million -3.39

Zscaler’s peers have higher revenue and earnings than Zscaler. Zscaler is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Analyst Ratings

This is a breakdown of current ratings for Zscaler and its peers, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Zscaler 0 8 2 1 2.36
Zscaler Competitors 229 941 1598 70 2.53

Zscaler presently has a consensus target price of $35.86, suggesting a potential downside of 1.34%. As a group, “Custom computer programming services” companies have a potential upside of 5.86%. Given Zscaler’s peers stronger consensus rating and higher possible upside, analysts clearly believe Zscaler has less favorable growth aspects than its peers.

Summary

Zscaler peers beat Zscaler on 11 of the 12 factors compared.

About Zscaler

Zscaler, Inc. operates as a cloud security company worldwide. The company develops a software-as-a-service based security platform that secures access for users and devices to applications and services. It serves airline and transportation, conglomerate, consumer good and retail, financial service, healthcare, manufacturing, media and communication, public sector and education, technology, and telecommunications service industries. The company was formerly known as SafeChannel, Inc., and changed its name to Zscaler, Inc. in August 2008. Zscaler, Inc. was incorporated in 2007 and is headquartered in San Jose, California.

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