MeritValue

Zscaler, Inc.

ZSdata completeness 88%11 fiscal years on file

Data notes: no data for concept 'investmentsAtFairValue'; no data for concept 'netInvestmentIncome'; no data for concept 'gainsOnRealEstateSales'; no data for concept 'realEstateImpairment'; no data for concept 'dividendsPaid'

The thesis, from the filings

Zscaler, Inc. earns about -19% on invested capital, below its ~9% cost of capital, but has diluted owners by 14% over 5 years — no moat visible in the numbers. The estimate methods put fair value between $166.89 and $299.55 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2022FY 2023FY 2024FY 2025FY 2026
Revenue$1.09B1$1.62B2$2.17B3$2.67B3$3.35B3
Net income−$390.3M4−$202.3M5−$57.7M6−$41.5M6−$63.2M6
Operating cash flow$321.9M7$462.3M8$779.8M9$972.5M9$1.13B9
Capital expenditure$69.3M10$97.2M11$144.6M12$164.3M12$277.3M12
Free cash flow (derived)$252.6M7$365.1M8$635.3M9$808.2M9$852.4M9
Total debt$968.7M13$1.13B14$1.14B14——
Cash & equivalents$1.01B15$1.26B16$1.42B17$2.39B18$928.4M18
Diluted shares140.9M144.9M149.6M154.4M160.2M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$162.17
your share of equity
Profit it earned you last year
−$3.94
Free cash flow it threw off
$53.2
Debt you’d be carrying
—

10 shares is a claim on $162.17 of net worth that earned you −$3.94 and generated $53.2 of cash last year.

iii. Is this a good business?
Moat signal · return on invested capital
-19% avg · 5y
FY22 -49%FY23 -23%FY24 -2%FY25 —FY26 -1%

It earned about -19% on invested capital against a ~9% cost of capital — below the cost of funding. The numbers show no moat.

seeing a moat in the numbers →
Management signal · capital allocation
+14% shares · 5y

Share count is up 14% over 5 years — owners have been diluted. Worth asking what they got for it. Total debt has risen 18% over the same window.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.5.0

The 2 estimate methods that apply put fair value between $166.89 and $299.55 a share. They rest on different assumptions, so where they diverge is the story.

DCF · Growth Exit 10Y
$299.55
assumptions (10)
  • riskFreeRate4.8%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth20.0%
  • fcfBase$808.2M
DCF · Growth Exit 5Y
$166.89
assumptions (10)
  • riskFreeRate4.8%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth20.0%
  • fcfBase$808.2M
Earnings Power Value
not applicable
normalized (5y-median) earnings non-positive — EPV undefined
Graham Number
not applicable
diluted EPS missing or non-positive — Graham Number undefined

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years20.0%
Discount rate (WACC)9.06%
Terminal growth2.5%
At your growth, a share is worth $166.89
The three cases
Bear0.0%$76.5
Base20.0%$166.89
Bull20.0%$166.89

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 20.0%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2022-07-31 · accession 0001713683-24-000109 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2023-07-31 · accession 0001713683-25-000158 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2024-07-31 · accession 0001713683-26-000157 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2022-07-31 · accession 0001713683-24-000109 (NetIncomeLoss)
  5. 10-K · period ending 2023-07-31 · accession 0001713683-25-000158 (NetIncomeLoss)
  6. 10-K · period ending 2024-07-31 · accession 0001713683-26-000157 (NetIncomeLoss)
  7. 10-K · period ending 2022-07-31 · accession 0001713683-24-000109 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2023-07-31 · accession 0001713683-25-000158 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2024-07-31 · accession 0001713683-26-000157 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2022-07-31 · accession 0001713683-24-000109 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2023-07-31 · accession 0001713683-25-000158 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2024-07-31 · accession 0001713683-26-000157 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2022-07-31 · accession 0001713683-23-000113 (LongTermDebt)
  14. 10-K · period ending 2023-07-31 · accession 0001713683-24-000109 (LongTermDebt)
  15. 10-K · period ending 2022-07-31 · accession 0001713683-23-000113 (CashAndCashEquivalentsAtCarryingValue)
  16. 10-K · period ending 2023-07-31 · accession 0001713683-24-000109 (CashAndCashEquivalentsAtCarryingValue)
  17. 10-K · period ending 2024-07-31 · accession 0001713683-25-000158 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2025-07-31 · accession 0001713683-26-000157 (CashAndCashEquivalentsAtCarryingValue)