Zscaler Inc (ZS, Financial), a leading software-as-a-service firm, has seen a significant surge in its stock price over the past three months. With a current market cap of $23.3 billion and a price of $158.35, the company's stock has experienced a 9.16% increase over the past quarter. Despite a minor dip of 0.56% over the past week, the overall trend remains positive. According to the GF Value, which calculates a stock's intrinsic value using historical multiples, past performance adjustments, and future business estimates, Zscaler Inc's stock is significantly undervalued. The current GF Value stands at $444.08, a slight increase from the past GF Value of $439.66, indicating a potential for further growth.
Unveiling Zscaler Inc
Zscaler Inc operates in the software industry, providing cloud-native cybersecurity solutions primarily to enterprise customers. The company's offerings are broadly divided into Zscaler Internet Access, which provides secure access to external applications, and Zscaler Private Access, which ensures secure access to internal applications. Headquartered in San Jose, California, Zscaler Inc went public in 2018 and has since been a significant player in the software industry. 
Profitability Analysis
When it comes to profitability, Zscaler Inc has a Profitability Rank of 3/10, indicating its profitability relative to other companies. The company's Operating Margin stands at -14.04%, better than 29.07% of 2759 companies. Its ROE is -35.38%, better than 18.75% of 2651 companies, while its ROA is -6.52%, better than 34.82% of 2817 companies. The company's ROIC is -13.87%, better than 27.71% of 2815 companies. These figures indicate that while Zscaler Inc has room for improvement in terms of profitability, it is performing better than a significant portion of its competitors. 
Growth Prospects
Zscaler Inc's Growth Rank is 8/10, indicating strong growth in terms of revenue and profitability. The company's 3-year and 5-year revenue growth rates per share are 49.60% and 34.80% respectively, better than over 92% of companies. The future total revenue growth rate estimate is 26.57%, better than 90.82% of 501 companies. However, the company's 3-year and 5-year EPS without NRI growth rates are -16.30% and -41.80% respectively, indicating a need for improvement. The future EPS without NRI growth rate estimate is 44.06%, better than 93.39% of 121 companies, suggesting a promising future for Zscaler Inc. 
Top Holders
The top three holders of Zscaler Inc's stock are Jim Simons (Trades, Portfolio), holding 620,700 shares (0.43%), Ron Baron (Trades, Portfolio), holding 128,952 shares (0.09%), and Ken Fisher (Trades, Portfolio), holding 12,214 shares (0.01%). Their significant investments in Zscaler Inc demonstrate their confidence in the company's future prospects.
Competitive Landscape
Zscaler Inc faces competition from several companies in the software industry. Its main competitors include VeriSign Inc (VRSN, Financial) with a market cap of $21.31 billion, Fleetcor Technologies Inc (FLT, Financial) with a market cap of $18.66 billion, and Cloudflare Inc (NET, Financial) with a market cap of $20.22 billion. Despite the competition, Zscaler Inc's recent performance and growth prospects indicate its potential to maintain a strong position in the industry.
Conclusion
In conclusion, Zscaler Inc's stock performance, profitability, growth, holders, and competitors all indicate a promising future for the company. Despite some areas for improvement, the company's strong growth prospects, significant undervaluation according to the GF Value, and the confidence demonstrated by its top holders suggest that Zscaler Inc is well-positioned for continued success in the software industry.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
