Zscaler, Inc.

TechnologySoftware - InfrastructureNASDAQ

$152.79

Market Cap: $24.57B

Zscaler, Inc. (ZS) Valuation Summary

Updated May 10, 2026 00:49

Model	Range	Fair Value	Upside
▸ Discounted Cash Flow
Revenue DCF 5Y	$1.54 – $53.11	$2.97	-98.1%
Revenue DCF 10Y	$13.21 – $142.41	$23.11	-84.9%
▸ Trading Multiples
EV/Revenue	$115.98 – $369.46	$209.41	+37.1%

Valuation History

DCF Analysis

Zscaler, Inc. (ZS) Revenue DCF (5Y)

REVENUE DCF FAIR VALUE

$23.11

Market Price

$152.79

Upside / Downside

-84.9%

Verdict

Overvalued

Using a Revenue DCF model with operating margin convergence from -4.8% to a target of 10.2% over 5 years, discounted at a WACC of 8.5%, Zscaler, Inc. (ZS) has an intrinsic value of $23.11 per share (range: $13.21 – $142.41).

Key Assumptions

Current Operating Margin

-4.8%

Target Operating Margin

10.2%

WACC

8.5%

Terminal Growth Rate

3.0%

Historical CapEx/Rev

8.6%

Target CapEx/Rev

6.7%

D&A/Revenue

4.5%

Tax Rate

21.0%

Operating margin fades linearly from the current level to the industry target over the 5-year projection. CapEx intensity fades from the historical average to a maintenance level (D&A × 1.5). Tax is only applied when operating income is positive (NOL shield).

Margin Convergence Projection

USD in millions. Mid-year discounting convention.

Year	Revenue	Growth	Op Margin	Op Income	NOPAT	D&A	CapEx	ΔNWC	FCFF	PV(FCFF)
2026	3,317	24.1%	-1.8%	-60	-60	148	(280)	207	-398	-382
2027	3,972	19.7%	1.2%	48	38	178	(327)	228	-339	-300
2028	4,725	18.9%	4.2%	199	158	211	(380)	262	-273	-223
2029	5,422	14.8%	7.2%	392	310	242	(426)	242	-116	-87
2030	6,322	16.6%	10.2%	647	511	283	(484)	313	-3	-2
2031	8,218	30.0%	10.2%	842	665	367	(614)	659	-241	-154
2032	10,556	28.4%	10.2%	1,081	854	472	(768)	812	-255	-150
2033	12,887	22.1%	10.2%	1,320	1,043	576	(913)	810	-105	-57
2034	14,914	15.7%	10.2%	1,527	1,207	667	(1,029)	704	141	70
2035	16,310	9.4%	10.2%	1,670	1,319	729	(1,094)	485	470	216

Enterprise Value Bridge

Sum of PV(FCFF)-1,068

Terminal Value (Gordon Growth at 3.0%)8,786

PV of Terminal Value4,045

Enterprise Value2,976

(–) Net Debt-592

Equity Value3,569

(÷) Shares Outstanding154

Fair Value per Share$23.11

Sensitivity Analysis — WACC × Target Operating Margin

WACC \ Target Op. Margin	4.2%	7.2%	10.2%	13.2%	16.2%
6.5%	$-19	$-2	$46	$94	$142
7.5%	$-18	$-4	$32	$68	$104
8.5%	$-17	$-5	$23	$52	$80
9.5%	$-16	$-6	$17	$41	$64
10.5%	$-15	$-6	$13	$33	$52

Current price: $152.79. Green = undervalued, Red = overvalued.

Working Capital Assumption

Net Working Capital is modeled at 34.8% of revenue (historical average of receivables + inventory − payables). Changes in NWC (ΔNWC) are computed year-over-year and subtracted from free cash flow.

Zscaler, Inc. (ZS) Revenue DCF (5Y)

REVENUE DCF FAIR VALUE

$2.97

Market Price

$152.79

Upside / Downside

-98.1%

Verdict

Overvalued

Key Assumptions

Current Operating Margin

-4.8%

Target Operating Margin

10.2%

WACC

8.5%

Terminal Growth Rate

3.0%

Historical CapEx/Rev

8.6%

Target CapEx/Rev

6.7%

D&A/Revenue

4.5%

Tax Rate

21.0%

Margin Convergence Projection

USD in millions. Mid-year discounting convention.

Year	Revenue	Growth	Op Margin	Op Income	NOPAT	D&A	CapEx	ΔNWC	FCFF	PV(FCFF)
2026	3,317	24.1%	-1.8%	-60	-60	148	(273)	207	-392	-376
2027	3,972	19.7%	1.2%	48	38	178	(312)	228	-324	-287
2028	4,725	18.9%	4.2%	199	158	211	(353)	262	-246	-200
2029	5,422	14.8%	7.2%	392	310	242	(384)	242	-75	-56
2030	6,322	16.6%	10.2%	647	511	283	(424)	313	58	40

Enterprise Value Bridge

Sum of PV(FCFF)-879

Terminal Value (Gordon Growth at 3.0%)1,077

PV of Terminal Value746

Enterprise Value-134

(–) Net Debt-592

Equity Value459

(÷) Shares Outstanding154

Fair Value per Share$2.97

Sensitivity Analysis — WACC × Target Operating Margin

WACC \ Target Op. Margin	4.2%	7.2%	10.2%	13.2%	16.2%
6.5%	$-6	$-4	$6	$30	$53
7.5%	$-6	$-4	$4	$22	$40
8.5%	$-6	$-4	$3	$17	$32
9.5%	$-5	$-4	$2	$14	$26
10.5%	$-5	$-3	$2	$12	$22

Current price: $152.79. Green = undervalued, Red = overvalued.

Working Capital Assumption

Net Working Capital is modeled at 34.8% of revenue (historical average of receivables + inventory − payables). Changes in NWC (ΔNWC) are computed year-over-year and subtracted from free cash flow.

Trading Multiples

Fair Value

$209.41

Market Price

$152.79

Upside / Downside

+37.1%

Verdict

Undervalued

Using the industry peer median EV/Revenue multiple (trailing + forward), Zscaler, Inc. (ZS) has a fair value of $209.41 based on 10 comparable companies in the Software - Infrastructure industry.

EV/Revenue Valuation — Software - Infrastructure

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/Revenue	Forward EV/Revenue
Zscaler, Inc.ZS	23,591	8.6x	6.9x
Western Digital CorporationWDC	159,901	17.1x	12.7x
Fortinet, Inc.FTNT	84,403	12.2x	10.7x
Monolithic Power Systems, Inc.MPWR	78,649	27.8x	21.1x
NXP Semiconductors N.V.NXPI	74,416	6.8x	6.6x
Datadog, Inc.DDOG	71,245	21.1x	17.1x
CoreWeave, Inc. Class A Common StockCRWV	60,008	13.9x	5.6x
Ubiquiti Inc.UI	56,084	21.8x	29.1x
Electronic Arts Inc.EA	50,161	6.5x	6.0x
Block, Inc.XYZ	41,767	1.6x	1.5x
Atlassian CorporationTEAM	24,263	4.4x	3.6x
Industry Median		13.0x	8.6x
(*) Revenue		2,673	3,317
= Enterprise Value		34,848	28,636
(-) Net Debt		-592	-592
Equity Value		35,440	29,228
(/) Outstanding shares		154	154
Fair Price		$230	$189

Selected Fair Value (avg of trailing + forward)

$209.41

+37.1%

Disclaimer: Sweet Value Lab provides estimated intrinsic values for informational purposes only. This is not financial advice. All models rely on assumptions that may not reflect future performance. Always do your own research before making investment decisions.

Model

Range

Fair Value

Upside

▸ Discounted Cash Flow

Revenue DCF 5Y

$1.54 – $53.11

$2.97

-98.1%

Revenue DCF 10Y

$13.21 – $142.41

$23.11

-84.9%

▸ Trading Multiples

EV/Revenue

$115.98 – $369.46

$209.41

+37.1%

DCF Analysis

Zscaler, Inc. (ZS) Revenue DCF (5Y)

REVENUE DCF FAIR VALUE

$23.11

Market Price

$152.79

Upside / Downside

-84.9%

Verdict

Overvalued

Key Assumptions

Current Operating Margin

-4.8%

Target Operating Margin

10.2%

WACC

8.5%

Terminal Growth Rate

3.0%

Historical CapEx/Rev

8.6%

Target CapEx/Rev

6.7%

D&A/Revenue

4.5%

Tax Rate

21.0%

Margin Convergence Projection

USD in millions. Mid-year discounting convention.

Year	Revenue	Growth	Op Margin	Op Income	NOPAT	D&A	CapEx	ΔNWC	FCFF	PV(FCFF)
2026	3,317	24.1%	-1.8%	-60	-60	148	(280)	207	-398	-382
2027	3,972	19.7%	1.2%	48	38	178	(327)	228	-339	-300
2028	4,725	18.9%	4.2%	199	158	211	(380)	262	-273	-223
2029	5,422	14.8%	7.2%	392	310	242	(426)	242	-116	-87
2030	6,322	16.6%	10.2%	647	511	283	(484)	313	-3	-2
2031	8,218	30.0%	10.2%	842	665	367	(614)	659	-241	-154
2032	10,556	28.4%	10.2%	1,081	854	472	(768)	812	-255	-150
2033	12,887	22.1%	10.2%	1,320	1,043	576	(913)	810	-105	-57
2034	14,914	15.7%	10.2%	1,527	1,207	667	(1,029)	704	141	70
2035	16,310	9.4%	10.2%	1,670	1,319	729	(1,094)	485	470	216

Enterprise Value Bridge

Sum of PV(FCFF)-1,068

Terminal Value (Gordon Growth at 3.0%)8,786

PV of Terminal Value4,045

Enterprise Value2,976

(–) Net Debt-592

Equity Value3,569

(÷) Shares Outstanding154

Fair Value per Share$23.11

Sensitivity Analysis — WACC × Target Operating Margin

WACC \ Target Op. Margin	4.2%	7.2%	10.2%	13.2%	16.2%
6.5%	$-19	$-2	$46	$94	$142
7.5%	$-18	$-4	$32	$68	$104
8.5%	$-17	$-5	$23	$52	$80
9.5%	$-16	$-6	$17	$41	$64
10.5%	$-15	$-6	$13	$33	$52

Current price: $152.79. Green = undervalued, Red = overvalued.

Working Capital Assumption

Net Working Capital is modeled at 34.8% of revenue (historical average of receivables + inventory − payables). Changes in NWC (ΔNWC) are computed year-over-year and subtracted from free cash flow.

Trading Multiples

Fair Value

$209.41

Market Price

$152.79

Upside / Downside

+37.1%

Verdict

Undervalued

Using the industry peer median EV/Revenue multiple (trailing + forward), Zscaler, Inc. (ZS) has a fair value of $209.41 based on 10 comparable companies in the Software - Infrastructure industry.

EV/Revenue Valuation — Software - Infrastructure

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/Revenue	Forward EV/Revenue
Zscaler, Inc.ZS	23,591	8.6x	6.9x
Western Digital CorporationWDC	159,901	17.1x	12.7x
Fortinet, Inc.FTNT	84,403	12.2x	10.7x
Monolithic Power Systems, Inc.MPWR	78,649	27.8x	21.1x
NXP Semiconductors N.V.NXPI	74,416	6.8x	6.6x
Datadog, Inc.DDOG	71,245	21.1x	17.1x
CoreWeave, Inc. Class A Common StockCRWV	60,008	13.9x	5.6x
Ubiquiti Inc.UI	56,084	21.8x	29.1x
Electronic Arts Inc.EA	50,161	6.5x	6.0x
Block, Inc.XYZ	41,767	1.6x	1.5x
Atlassian CorporationTEAM	24,263	4.4x	3.6x
Industry Median		13.0x	8.6x
(*) Revenue		2,673	3,317
= Enterprise Value		34,848	28,636
(-) Net Debt		-592	-592
Equity Value		35,440	29,228
(/) Outstanding shares		154	154
Fair Price		$230	$189

Selected Fair Value (avg of trailing + forward)

$209.41

+37.1%