Zscaler (NASDAQ: ZS) remains one of the most compelling cybersecurity plays available, even as its stock sits 55% below its 2021 record high.
The company built its reputation as an early pioneer of zero-trust cybersecurity architecture, a model that has proven highly effective against modern AI-powered threats.
Zero-trust systems treat every attempted network connection as hostile, requiring verification of user credentials, device identity, and physical location before granting any access.
Zscaler’s Zero Trust Exchange goes further by limiting each verified employee to only the applications they are specifically authorized to use within a corporate network.
This layered approach ensures that even a successful breach at the identity level does not automatically hand attackers full access to sensitive company data.
Earlier this year, Zscaler expanded the Zero Trust Exchange to address the emerging security risks posed by AI agents operating autonomously inside corporate environments.
The company introduced AI Broker to monitor agent communications, the AI Registry to give employees visibility over what assets each agent can access, and the AI Access Graph to map connections across the entire network.
AI powerhouse Anthropic published a white paper encouraging businesses to adopt zero-trust architecture specifically when deploying AI agents, a development that could accelerate demand for Zscaler’s offerings.
Zscaler closed its fiscal 2026, which ended July 31, with a record $3.35 billion in revenue, representing 25% growth over the prior year and exceeding management’s most recent forecast of $3.33 billion.
The company reported 950 customers adopting its “Zero Trust Everywhere” philosophy as of July 31, a striking 171% increase compared to the same point last year.
Despite the record performance, Zscaler issued conservative guidance for fiscal 2027, pointing to revenue growth of approximately 17%, partly due to the recent departure of two senior sales employees.
Those employees have since been replaced, leaving open the possibility that revenue growth could reaccelerate during the second half of the fiscal year.
Of the 49 analysts tracked by The Wall Street Journal who cover Zscaler, 34 have assigned the stock a buy rating, with five more in the overweight camp and the remaining 10 recommending a hold.
Not a single analyst covering Zscaler has issued a sell recommendation, reflecting a strong consensus around the stock’s long-term potential.
The analysts’ average price target sits at $207.40, implying roughly 25% upside over the next 12 months, while the Street-high target of $250 points to potential gains of 50%.
Zscaler currently trades at a price-to-sales ratio of 7.9, a significant discount to its own three-year average of 13.2 and far below rivals Palo Alto Networks and CrowdStrike, which carry P/S ratios of 22.1 and 39.6, respectively.
Matching its own three-year average P/S ratio alone would require the stock to climb approximately 67%, which would translate to a share price of around $277.
With AI adoption accelerating across enterprises and zero-trust architecture gaining broader recognition as the standard for secure AI deployment, Zscaler appears well-positioned for the years ahead.
