Software - Infrastructure · NASDAQ
Current Price
$134.73
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on Zscaler, Inc. with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
Open DCF Calculator for ZSZscaler, Inc. operates as a cloud security company worldwide. The company provides Zscaler Internet Access solution that provides users, servers, operational technology, Internet of Things device secure access to externally managed applications, including software-as-a-service (SaaS) applications and Internet destinations; and Zscaler Private Access solution, which is designed to provide access to managed applications hosted internally in data centers, and private or public clouds. It also offers Zscaler Digital Experience that measures end-to-end user experience across business applications, as well as provides an easy to understand digital experience score for each user, application, and location within an enterprise. In addition, the company provides workload segmentation solutions comprising Zscaler Cloud Security Posture Management that identifies and remediates application misconfigurations in SaaS, infrastructure as a service, and platform as a service to reduce risk and ensure compliance with industry and organizational benchmarks; and Zscaler Cloud Workload Segmentation, which is designed to secure application-to-application communications inside public clouds and data centers to stop lateral threat movement, as well as prevents application compromise and reduces the risk of data breaches. Its platform modules include Zscaler Central Authority, Zscaler Enforcement Node, and Zscaler Log Servers. It serves customers in airlines and transportation, conglomerates, consumer goods and retail, financial services, healthcare, manufacturing, media and communications, public sector and education, technology, and telecommunications services 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.
ROIC (TTM)
-3.2%
ROE (TTM)
-3.5%
FCF Yield
4.36%
Based on trailing twelve-month data, ZS shows a free cash flow per share of N/A and a ROIC of -3.2%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 4.36% are important context metrics when evaluating ZS's stock valuation relative to peers.
The intrinsic value of ZS depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether ZS is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $134.73. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on Zscaler, Inc.: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Software - Infrastructure industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting ZS's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Zscaler, Inc., this means projecting how much free cash flow the Software - Infrastructure will produce over the next 5-10 years, then discounting those amounts to today's dollars. ZS's ROIC of -3.2% suggests the company may face challenges generating returns above its cost of capital.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For ZS, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
