This year SaaSpocalypse and the most recent sales leadership departures in May spooked investors as management guided for 16%-17% growth for FY2027, a deceleration from FY26 ~24% growth.
That resulted in a 30% drop in a single day, and the share price has halved in the past year.
But I think the valuation is interesting, particularly if we compare to cyber peers:
- PANW growing ~14–15% (organically), trades at ~16x forward EV/Sales * CRWD growing ~24–32% in ARR, trades at ~26x forward EV/Sales * NET growing ~30–34%, trades at ~29x forward EV/Sales * OKTA growing ~12%, guided for 9%-10%, trades at ~5.6x forward EV/Sales * ZS growing 16–17%, trades at ~5.2x forward EV/Sales
PANW is growing at roughly the same rate as ZS's guided deceleration and commands 3x the multiple. Okta is growing at less than ZS, and yet they trade at a similar multiple.
This does seem strange to me. For Zscaler, I think this multiple for a 16-17% growth is attractive.
Thoughts?
My full analysis: https://economiyaki.substack.com/p/zscaler