Complete ZS Stock Valuation Analysis
Comprehensive intrinsic value analysis using 2 different methodologies
ZS DCF Analysis
ZS (Zscaler, Inc.) discounted cash flow analysis with multiple scenarios, growth assumptions, and terminal value calculations
Financial Projections
| Metrics | 2022 (Historical) | 2023 (Historical) | 2024 (Historical) | 2025 (Projected) | 2026 (Projected) | 2027 (Projected) | 2028 (Projected) | 2029 (Projected) |
|---|---|---|---|---|---|---|---|---|
| Revenue | $1.1B | $1.6B | $2.2B | $2.7B | $3.4B | $4.2B | $5.3B | $6.6B |
| Revenue Growth % | - | 48.2% | 34.1% | 25.0% | 25.0% | 25.0% | 25.0% | 25.0% |
| EBIT | $-327.4M | $-234.6M | $-121.5M | $135.5M | $169.4M | $211.7M | $264.6M | $330.8M |
| EBIT Margin % | -30.0% | -14.5% | -5.6% | 5.0% | 5.0% | 5.0% | 5.0% | 5.0% |
| Tax Rate % | 25.0% | 25.0% | 25.0% | 25.0% | 25.0% | 25.0% | 25.0% | 25.0% |
| NOPAT | $-245.6M | $-176.0M | $-91.1M | $101.6M | $127.0M | $158.8M | $198.5M | $248.1M |
| NOPAT Margin % | -22.5% | -10.9% | -4.2% | 3.8% | 3.8% | 3.8% | 3.8% | 3.8% |
| Capex | $90.6M | $128.7M | $194.9M | $248.9M | $295.6M | $351.0M | $416.8M | $495.0M |
| Capex / Revenue % | 8.3% | 8.0% | 9.0% | 9.2% | 8.7% | 8.3% | 7.9% | 7.5% |
| Depreciation | $49.5M | $66.8M | $80.9M | $112.0M | $140.0M | $175.0M | $218.8M | $273.4M |
| D&A / Revenue % | 4.5% | 4.1% | 3.7% | 4.1% | 4.1% | 4.1% | 4.1% | 4.1% |
| Change in NWC | $-5.9M | $232.2M | $-1.1B | $-44.9M | $-44.9M | $-44.9M | $-44.9M | $-44.9M |
| NWC Change / Revenue % | -0.5% | 14.4% | -49.4% | -1.7% | -1.3% | -1.1% | -0.8% | -0.7% |
| Unlevered FCF | $-280.8M | $-470.1M | $865.6M | $9.6M | $16.3M | $27.6M | $45.3M | $71.4M |
| UFCF % Chg. | - | -67.4% | 284.1% | -98.9% | 70.3% | 69.5% | 63.8% | 57.8% |
| FCF / Revenue % | -25.7% | -29.1% | 39.9% | 0.4% | 0.5% | 0.7% | 0.9% | 1.1% |
| Discount Factor | - | - | - | 0.918 | 0.842 | 0.773 | 0.709 | 0.651 |
| Present Value of FCF | - | - | - | $8.8M | $13.7M | $21.4M | $32.1M | $46.5M |
| Sum of PV of UFCF | - | - | - | $8.8M | $22.5M | $43.9M | $76.0M | $122.4M |
WACC Calculation
Weighted Average Cost of Capital used for discounting cash flows.
| WACC Calculation | Value |
|---|---|
| Cost of Debt | 4.9% |
| Tax Rate | 25.0% |
| After Tax Cost of Debt | 3.7% |
| Risk Free Rate | 4.40% |
| Market Risk Premium | 4.3% |
| Beta | 1.09 |
| Cost of Equity | 9.1% |
| Total Debt | $1.2B |
| Market Cap | $47.7B |
| Total Capital | $48.9B |
| Debt Weighting | 2.5% |
| Equity Weighting | 97.5% |
| WACC | 9.0% |
Terminal Value
Choose between perpetuity growth or exit multiple methods.
| Terminal Value Calculation | Value |
|---|---|
| Terminal Growth Rate | 2.5% |
| Final Year FCF | $71.4M |
| Terminal Value | $1.1B |
| PV of Terminal Value | $735.3M |
| Cumulative PV of UFCF | $122.4M |
| Net Debt | $-185.1M |
| Equity Value | $1.0B |
| Shares Outstanding | 149.6M |
| Implied Share Price | $7 |
| Current Share Price | $306 |
| Implied Upside/(Downside) | -97.7% |
Valuation Summary
$6.97
Implied Price
$306.24
Current Price
-97.7%
Upside/Downside
9.0%
WACC
ZS Peer Valuation Analysis
Relative valuation based on comparable company trading multiples
Peer Valuation Analysis
Fair Value Range Analysis
Based on median multiples from 11 peer companies in Technology
P/E Ratio
$-4.15
-101.4%
Peer Median: 41.0x
EV/EBITDA
$16.27
-94.7%
Peer Median: 24.1x
P/S Ratio
$201.54
-34.2%
Peer Median: 13.0x
Interpretation: Each multiple provides a different perspective on fair value. Consider which multiple is most relevant for ZS's business model and current situation.
Multiple Comparison
| Multiple | ZS Current | Peer Median | Peer Average | Premium/Discount | Assessment |
|---|---|---|---|---|---|
| P/E Ratio | -3030.5x | 41.0x | 37.3x | -7486.9% | Undervalued |
| EV/EBITDA | 451.2x | 24.1x | 24.1x | 1774.9% | Overvalued |
| P/S Ratio | 19.7x | 13.0x | 12.5x | 52.0% | Overvalued |
Peer Companies
Click any company to view their valuation
| Company | Market Cap | P/E Ratio | EV/EBITDA | P/S Ratio |
|---|---|---|---|---|
| $486.76B | 41.0x | 24.1x | 8.7x | |
| $213.40B | 140.2x | 91.3x | 18.6x | |
| $133.34B | 113.0x | 87.9x | 15.6x | |
| $118.45B | 0.0x | 476.3x | 30.0x | |
| $80.18B | 43.3x | 33.4x | 13.1x | |
| $47.68B | 0.0x | 451.2x | 19.7x | |
| $19.06B | 0.0x | 0.0x | 21.5x | |
| $18.13B | 28.4x | 15.3x | 4.6x | |
| $8.12B | 0.0x | 0.0x | 10.7x | |
| $8.32B | 111.8x | 89.0x | 8.4x | |
| $3498.31B | 36.3x | 23.6x | 13.0x |