Assessing Zscaler (ZS) Valuation After Peer Earnings Spark AI Cybersecurity Rally
Assessing Zscaler (ZS) Valuation After Peer Earnings Spark AI Cybersecurity Rally
Publish Date: 2026-05-02 15:57:00
Source Domain: simplywall.st
Zscaler (ZS) is back in focus after its shares moved 2.5% higher, riding a broader software rally sparked by strong earnings and upbeat forecasts from peers such as Atlassian and Twilio.
See our latest analysis for Zscaler.
Even after the latest 6.99% 1 day share price gain to US$139.81 and a 2.30% 30 day share price return, Zscaler is still coming off a weaker patch. The 36.61% year to date share price decline and the 39.34% 1 year total shareholder return loss contrast with a 56.28% total shareholder return over three years. This suggests recent momentum has cooled after a stronger multi year run.
If this cybersecurity move has your attention, it could be a good moment to see what else is shaping the future of AI infrastructure through our 37 AI infrastructure stocks
With Zscaler now trading at a discount to both some analyst targets and certain intrinsic value estimates, the key question is whether recent share price weakness offers a reset entry point or if the market already reflects future growth.
Most Popular Narrative: 19% Undervalued
With Zscaler last closing at $139.81 against a narrative fair value of $172.68, the current price sits below what this narrative implies.
Zscaler is revolutionizing cloud security with the industry’s first Security as a Service platform. Their solutions are used by more than 5,000 leading organizations, including 50 of the Fortune 500. As the internet becomes the new corporate network and organizations increasingly rely on cloud based services, Zscaler’s zero trust architecture and cloud security platform are well positioned to benefit from these trends.
Read the complete narrative.
Curious what kind of revenue trajectory and profit margin profile sit behind that valuation gap? The narrative leans heavily on long term cloud adoption and zero trust demand to justify its fair value.
Result: Fair Value of $172.68 (UNDERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts.
However, this…
