Zscaler, Inc.: what the price is pricing in

The price implies cash-flow growth of 48.1% a year; our model expects 20.0%. That gap is wide enough for a short position this quarter. Switch lens below to see the same question asked of earnings, growth, sales and book value.

What growth in cash flow is the price paying for?

The price implies cash-flow growth of 48.1% a year; our model expects 20.0%.

Market more optimistic than our model: short this quarter

What the price implies What our model expects

Quarters with a position80 long, 8 short, since December 31, 2020

Beat the S&P 5005 of 862.5% of quarters held

Strategy against the index−30.0%cumulative; worst fall -56.6%

$10,000 became$12,174S&P 500 bought and held: $15,973

Over time

The growth in owner earnings (free cash flow after stock-based pay) that would justify the share price in our discounted-cash-flow model, against the growth the model itself assumes from the company's record.

Growth our model assumes Growth the price implies Long quarter Short quarter. Lower panel: the share price at each quarter end, adjusted for later share splits and spin-offs (the table below gives the price as traded).

$10,000 trading the gap vs the S&P 500

StrategyS&P 500, buy and hold Hypothetical, before costs. The strategy holds the S&P 500 and only changes on a signal: it switches into ZS in long quarters and adds a short of ZS in short quarters. The gap between the lines is what the signal added or lost.

Skill or luck?

In plain English: Across 8 quarters with a position, this lens beat the S&P 500 in 5, by +0.6% a quarter on average. That could easily be chance. One company is a small sample: the results across all companies are the better guide.

Positions	Quarters	Beat the S&P 500	Average vs S&P 500, a quarter	Typical (median), a quarter	A year	Confidence (t)	Evidence
Longs	0	—	—	—	—	—	—
Shorts	8	62.5%	+0.6%	+13.6%	−16.3%	0.05	No reliable evidence
All positions	8	62.5%	+0.6%	+13.6%	−16.3%	0.05	No reliable evidence

Each position is measured against the S&P 500 over the same quarter: a long earns the stock's return minus the index's, a short the index's minus the stock's. "A year" compounds the per-quarter results. Evidence: strong at a t-statistic of 2 or more, some from 1.5; "worse" when the result is that far below zero; one company's history is a small sample, so read these alongside the results across all companies.

Every quarter (9)

From	Price paid	Growth the price implies	Growth our model assumes	Position	ZS	S&P 500
September 30, 2026 (open)	$199.42	48.1%	20.0%	Short	+12.2%	−0.8%
June 30, 2026	$141.15	39.6%	20.0%	Short	+41.3%	+2.4%
March 31, 2026	$140.29	39.7%	20.0%	Short	+0.6%	+15.1%
December 31, 2025	$224.92	66.4%	20.0%	Short	−37.6%	−4.4%
September 30, 2025	$299.66	78.3%	20.0%	Short	−24.9%	+2.7%
June 30, 2025	$313.94	83.6%	20.0%	Short	−4.5%	+8.1%
March 31, 2025	$198.42	82.8%	20.0%	Short	+58.2%	+10.8%
March 31, 2021	$171.67	24.4%	13.0%	Short	+25.9%	+8.4%
December 31, 2020	$199.71	53.1%	13.0%	Short	−14.0%	+6.3%

Price paid: the closing price that day as traded, before any later share split.

What profit margin is the price paying for?

The price implies an owner-earnings margin of 22.8%; the company has kept 5.6%.

Market more optimistic than our model: short this quarter

What the price implies What the company delivered

Quarters with a position180 long, 18 short, since March 31, 2022

Beat the S&P 50010 of 1855.6% of quarters held

Strategy against the index−31.1%cumulative; worst fall -65.6%

$10,000 became$13,724S&P 500 bought and held: $17,936

Over time

The owner-earnings margin (free cash flow after stock pay, as a share of revenue) the price requires at our model's growth, against the margin the company has delivered over three years.

Margin delivered Margin the price implies Long quarter Short quarter. Lower panel: the share price at each quarter end, adjusted for later share splits and spin-offs (the table below gives the price as traded).

$10,000 trading the gap vs the S&P 500

Skill or luck?

In plain English: Across 18 quarters with a position, this lens beat the S&P 500 in 10, by +1.2% a quarter on average. That could easily be chance. One company is a small sample: the results across all companies are the better guide.

Positions	Quarters	Beat the S&P 500	Average vs S&P 500, a quarter	Typical (median), a quarter	A year	Confidence (t)	Evidence
Longs	0	—	—	—	—	—	—
Shorts	18	55.6%	+1.2%	+3.8%	−7.9%	0.21	No reliable evidence
All positions	18	55.6%	+1.2%	+3.8%	−7.9%	0.21	No reliable evidence

Every quarter (19)

From	Price paid	Margin the price implies	Margin delivered	Position	ZS	S&P 500
September 30, 2026 (open)	$199.42	22.8%	5.6%	Short	+12.2%	−0.8%
June 30, 2026	$141.15	16.9%	6.2%	Short	+41.3%	+2.4%
March 31, 2026	$140.29	17.6%	6.4%	Short	+0.6%	+15.1%
December 31, 2025	$224.92	28.5%	3.1%	Short	−37.6%	−4.4%
September 30, 2025	$299.66	39.5%	2.6%	Short	−24.9%	+2.7%
June 30, 2025	$313.94	43.4%	2.3%	Short	−4.5%	+8.1%
March 31, 2025	$198.42	28.7%	1.6%	Short	+58.2%	+10.8%
December 31, 2024	$180.41	26.8%	-1.4%	Short	+10.0%	−4.3%
September 30, 2024	$170.94	28.5%	-2.7%	Short	+5.5%	+2.5%
June 30, 2024	$192.19	48.3%	-3.3%	Short	−11.1%	+5.8%
March 31, 2024	$192.63	51.9%	-3.8%	Short	−0.2%	+4.4%
December 31, 2023	$221.56	64.6%	-7.4%	Short	−13.1%	+10.4%
September 30, 2023	$155.59	49.1%	-8.9%	Short	+42.4%	+11.6%
June 30, 2023	$146.30	50.5%	-9.6%	Short	+6.3%	−3.2%
March 31, 2023	$116.83	44.7%	-10.2%	Short	+25.2%	+8.7%
December 31, 2022	$111.90	47.6%	-11.7%	Short	+4.4%	+7.5%
September 30, 2022	$164.37	75.8%	-11.9%	Short	−31.9%	+7.6%
June 30, 2022	$149.51	77.2%	-11.2%	Short	+9.9%	−4.9%
March 31, 2022	$241.28	140.9%	-9.1%	Short	−38.0%	−16.1%

Price paid: the closing price that day as traded, before any later share split.

What return on equity is the price paying for?

The price implies a return on equity of 83.8%; the company earned -3.7%.

Market more optimistic than our model: short this quarter

What the price implies What the company delivered

Quarters with a position230 long, 23 short, since December 31, 2020

Beat the S&P 50012 of 2352.2% of quarters held

Strategy against the index−42.3%cumulative; worst fall -65.6%

$10,000 became$14,528S&P 500 bought and held: $22,025

Over time

The return on equity that justifies the price-to-book ratio, (P/B)(r − g) + g with an 8.5% required return and 2.5% long-run growth, against the return the company delivered last year.

Return on equity delivered Return on equity the price implies Long quarter Short quarter. Lower panel: the share price at each quarter end, adjusted for later share splits and spin-offs (the table below gives the price as traded).

$10,000 trading the gap vs the S&P 500

Skill or luck?

In plain English: Across 23 quarters with a position, this lens beat the S&P 500 in 12, by +0.6% a quarter on average. That could easily be chance. One company is a small sample: the results across all companies are the better guide.

Positions	Quarters	Beat the S&P 500	Average vs S&P 500, a quarter	Typical (median), a quarter	A year	Confidence (t)	Evidence
Longs	0	—	—	—	—	—	—
Shorts	23	52.2%	+0.6%	+3.0%	−9.1%	0.11	No reliable evidence
All positions	23	52.2%	+0.6%	+3.0%	−9.1%	0.11	No reliable evidence

Every quarter (24)

From	Price paid	Return on equity the price implies	Return on equity delivered	Position	ZS	S&P 500
September 30, 2026 (open)	$199.42	83.8%	-3.7%	Short	+12.2%	−0.8%
June 30, 2026	$141.15	64.1%	-3.6%	Short	+41.3%	+2.4%
March 31, 2026	$140.29	69.8%	-2.4%	Short	+0.6%	+15.1%
December 31, 2025	$224.92	119.9%	-2.7%	Short	−37.6%	−4.4%
September 30, 2025	$299.66	156.8%	-2.7%	Short	−24.9%	+2.7%
June 30, 2025	$313.94	182.6%	-1.2%	Short	−4.5%	+8.1%
March 31, 2025	$198.42	129.6%	-3.2%	Short	+58.2%	+10.8%
December 31, 2024	$180.41	128.0%	-5.8%	Short	+10.0%	−4.3%
September 30, 2024	$170.94	147.1%	-8.7%	Short	+5.5%	+2.5%
June 30, 2024	$192.19	181.6%	-18.6%	Short	−11.1%	+5.8%
March 31, 2024	$192.63	213.8%	-27.1%	Short	−0.2%	+4.4%
December 31, 2023	$221.56	270.9%	-31.2%	Short	−13.1%	+10.4%
September 30, 2023	$155.59	228.2%	-47.5%	Short	+42.4%	+11.6%
June 30, 2023	$146.30	242.4%	-60.8%	Short	+6.3%	−3.2%
March 31, 2023	$116.83	235.7%	-76.5%	Short	+25.2%	+8.7%
December 31, 2022	$111.90	169.2%	-70.8%	Short	+4.4%	+7.5%
September 30, 2022	$164.37	264.9%	-71.9%	Short	−31.9%	+7.6%
June 30, 2022	$149.51	236.2%	-63.5%	Short	+9.9%	−4.9%
March 31, 2022	$241.28	382.8%	-58.3%	Short	−38.0%	−16.1%
December 31, 2021	$321.33	504.7%	-51.7%	Short	−24.9%	−4.6%
September 30, 2021	$262.22	424.8%	-54.7%	Short	+22.5%	+11.1%
June 30, 2021	$216.06	350.7%	-46.6%	Short	+21.4%	+0.6%
March 31, 2021	$171.67	281.8%	-38.0%	Short	+25.9%	+8.4%
December 31, 2020	$199.71	327.9%	-29.0%	Short	−14.0%	+6.3%

Price paid: the closing price that day as traded, before any later share split.

How the test works

At each quarter end since March 2010 we rebuild the models from Zscaler, Inc.'s quarters ending at least 90 days earlier (and no more than 200 days before that), using the figures as later filed, including any restatement, and value them at that day's close, adjusted for later share splits and spin-offs so that price and share count are on the same basis. A wide enough gap is a long or a short for one quarter (growth 10 points; margin and return on equity 5 points; a PEG under 0.75 or over 3), measured on total return against the S&P 500. The rules were set before the test. No trading or borrowing costs; today's list of companies. Not investment advice. All companies and the results across them.

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Figures from Zscaler, Inc.'s SEC filings (10-K and 10-Q), retrieved October 20, 2026. How we read and check them: methodology and data sources. Not investment advice. Back to Zscaler, Inc.