Zscaler, Inc. operates as a cloud security company worldwide. The company develops a software-as-a-service based security platform that secures access for users and devices to applications and services. It serves airline and transportation, conglomerate, consumer good and retail, financial service, healthcare, manufacturing, media and communication, public sector and education, technology, and telecommunications service industries. The company was formerly known as SafeChannel, Inc., and changed its name to Zscaler, Inc. in August 2008. Zscaler, Inc. was founded in 2007 and is based in San Jose, California.
ZS Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Zscaler Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Zscaler Inc ranked in the 78th percentile in terms of potential gain offered. Moreover, under all the scenarios we modelled, the output consistently forecasted positive returns. The most interesting components of our discounted cash flow analysis for Zscaler Inc ended up being:
Zscaler Inc's interest coverage rate -- a measure of gross earnings relative to interest payments -- comes in at -21.43. This coverage rate is greater than that of merely 5.32% of stocks we're observing for the purpose of forecasting via discounted cash flows.
As a business, Zscaler Inc experienced a tax rate of about 0% over the past twelve months; relative to its sector (Technology), this tax rate is higher than only 0% of stocks generating free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
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Zscaler ([[ZS]] +2.0%) has expanded strategic partnership with VMware ([[VMW]] +2.7%) to help large organizations simplify the adoption of a complete Secure Access Service Edge ((SASE)) architecture and more effectively implement Zero Trust security. Jay Chaudhry, Chairman and CEO of Zscaler said, “By integrating our purpose-built cloud security with VMware’s...
Zscaler's (ZS) recent earnings report offered plenty of positives and largely affirmed my positive view of its long-term positioning as a secular beneficiary of the shift toward secure and efficient access for remote work. That said, there are competitive risks on the horizon, particularly from Palo Alto Networks' (PANW) Prisma...
Aaron Butler on Seeking Alpha | September 19, 2020
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