Zscaler (ZS) has become a focal point for investors after recent trading left the stock around $237.82. Its performance over the past month and past three months has sharply outpaced its 1-year total return. Recent trading has been choppy for Zscaler, with the share price falling 4.04% in the last session and 6.79% over the past week. However, the 30-day share price return of 19.26% and 90-day gain of 57.29% point to momentum that contrasts sharply with a 1-year total shareholder return that declined 28.18%, even as the 3-year total shareholder return sits at 44.69% and the 5-year total shareholder return is lower by 29.74%. Scan how Zscaler stacks up against other fast-moving software opportunities by reviewing our hand picked list of 18 high quality undiscovered gems in the same broader growth universe. The rebound has pulled Zscaler close to analyst targets, while some models still point to a discount to estimated fair value. Is the market’s caution after last year’s drop giving you an opening or a warning signal? Most Popular Narrative: 4.9% Undervalued Against a last close of $237.82, the most followed narrative pegs Zscaler’s fair value at $249.97. This frames the current pullback as a modest discount rather than a stretch.
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 36 investors see Zscaler as 5% undervalued. Result: Fair Value of $249.97 (UNDERVALUED) Still, Zscaler’s AI platform pitch could be knocked off course if AI security adoption stays niche or if larger vendors bundle similar tools more aggressively. Find out about the key risks to this Zscaler narrative. Another View: What Zscaler’s P/S Ratio Is Telling You While the SWS DCF model sees Zscaler trading below future cash flow value, the market’s P/S yardstick paints a tougher picture. At 11.6x sales, the stock trades at roughly 3x the US Software industry average of 3.9x and above the 11.3x peer group. It also sits well above the fair ratio of 9.7x, a level the market could move toward over time. For investors, that premium raises a simple question: Is the AI security story strong enough to justify paying well over sector and fair ratio benchmarks? See what the numbers say about this price — find out in our valuation breakdown. NasdaqGS:ZS P/S Ratio as at Oct 2026Next Steps Mixed signals on Zscaler’s momentum and valuation can feel confusing at first glance, so move quickly through the numbers and pressure test the story for yourself. For a clear snapshot of both the upside and the concerns investors are weighing, review the 2 key rewards and 1 important warning sign. Looking for more ideas beyond Zscaler? If Zscaler has your attention but you do not want to rely on a single story, broaden your watchlist with a few targeted stock screens. 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
financial situation. We aim to bring you long-term focused analysis driven by fundamental data.
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.Valuation is complex, but we’re here to simplify it.Discover if Zscaler might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.Access Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
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