Zscaler (NASDAQ: ZS) has seen a dramatic decline from its all-time high of $368.78 per share in November 2021, now trading around $139 as macroeconomic pressures and rising interest rates weigh on its valuation. Despite this downturn, the company’s innovative “zero trust” cybersecurity tools continue to attract a robust customer base, including 40% of the Forbes Global 2000. Zscaler’s revenue growth from fiscal 2020 to fiscal 2025 has been impressive, with CAGRs of 44% and 75% for revenue and adjusted net income, respectively, although it remains unprofitable on a GAAP basis.
Analysts project a 21% revenue CAGR from fiscal 2025 to 2028, with expectations of GAAP profitability by the end of that period. The current market cap of $22.1 billion, which is less than 7 times the anticipated $3.3 billion revenue for fiscal 2026, suggests Zscaler is undervalued in the expanding zero-trust market, projected to grow at a 16.6% CAGR through 2030.
For market professionals, Zscaler presents a compelling long-term investment opportunity, particularly for those willing to bet on its recovery and the broader adoption of zero-trust cybersecurity solutions.
Source: fool.com