Zscaler (ZS) Ransomware Report Puts Its AI Security Valuation Back In Focus #AI

Zscaler (ZS) put fresh numbers around cyber risk with its ThreatLabz 2026 Ransomware Report, flagging a more than 275% jump in attacks and extensive use of AI to drive large scale data theft.

For investors tracking Zscaler, the latest ThreatLabz findings land after a mixed stretch, with the share price down 5.6% over the past week but posting a 35.4% 90 day share price return, while the 1 year total shareholder return has declined 33.8%.

Scan how Zscaler’s ransomware insights compare with those of its peers by reviewing hand picked 88 AI infrastructure stocks shaping the next phase of security and data infrastructure.

Bulls point to Zscaler’s role in zero trust security and its ransomware data as support for a premium, while bears focus on recent share price volatility and ongoing losses. Which case does the current valuation appear to favor?

Most Popular Narrative: 21% Undervalued

On the most followed narrative, Zscaler’s fair value of $250 sits well above the last close at $198.36, which puts a spotlight on how much of its AI security potential the market is currently pricing in.

The market still largely values Zscaler as a Zero Trust security company. I believe the more important question is whether it becomes a foundational platform for securing enterprise AI.

Fiscal 2026 results showed accelerating ARR growth, record large-customer activity, growing adoption of non-seat-based products, and early evidence that Security for AI is resonating with customers. Security for AI bookings grew more than 50% quarter-over-quarter, while 70% of those wins included Data Security products, suggesting meaningful platform expansion opportunities.

See why 5 investors see Zscaler as 21% undervalued.

According to andrei9868, the narrative hinges on Zscaler shifting from a pure Zero Trust provider toward being a policy and control layer for enterprise AI, with Security for AI and data protection features tying usage to workloads, models, and agents rather than just human seats. That framing helps explain why this view sees fair value materially above the current share price even though Zscaler remains loss making and revenue growth is forecast at 13.2% per year, slower than both 20% and the wider US market at 13.7%.

Under this lens, the $250 fair value reflects expectations that AI related security demand could expand Zscaler’s addressable market, while the present $198.36 price and 23.5% discount to Simply Wall St’s estimate of future cash flow value suggest the stock is not being priced as a broad AI security platform yet. At the same time, there are clear tension points, including ongoing losses of $63.2m, forecast profit growth that still needs to materialize, insider selling over the past three months, and a P/S ratio that screens as expensive against the wider US software group even if it looks more reasonable relative to closer peers.

Result: Fair Value of $250 (UNDERVALUED)

Still, the Zscaler story can break if Security for AI adoption stalls, or if ongoing losses and insider selling keep pressure on the current valuation narrative.

Find out about the key risks to this Zscaler narrative.

Another View: What Zscaler’s P/S Ratio Is Telling You

There is a different read on Zscaler when you focus on its P/S ratio. The stock trades at 9.6x sales compared with 3.7x for the wider US software group and a fair ratio of 9.3x, even though peers average 10.3x. That premium to the sector, but small gap above the fair ratio, raises a simple question: How much room is there for error if growth cools or AI security takes longer to scale?

See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

Mixed signals around Zscaler rarely stay neutral for long, so review the full set of data, weigh both sides, and shape your own call. To see how the risks and rewards line up, start with the 2 key rewards and 1 important warning sign.

Looking For More Ideas Beyond Zscaler?

Do not stop your research with Zscaler. Broaden your opportunity set by scanning other companies that match the kind of risk, quality, or income profile you want next.

This article by Simply Wall St is general in nature. We provide commentary based on historical data
and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your
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Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Simply Wall St has no position in any stocks mentioned.

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