Zscaler Is Very Cheap, But I'm Not Convinced After Fiscal Q4 Earnings

Zscaler, Inc. delivered strong Q4 results, with 25% YoY revenue growth and a record non-GAAP operating margin, but guides for decelerating growth in fiscal 2027.

ZS trades at a historically low forward P/E of ~36x, offering relative value, yet it lacks the explosive AI-driven growth seen in leading cybersecurity peers.

Large-deal activity surged, with Fortune 500 penetration reaching 50% and net retention rate at 115%, indicating solid enterprise adoption and expansion.

ZS remains a patient investor play, as future growth is likely priced in and near-term upside is limited by competitive intensity and modest AI innovation.