ZScaler(ZS) is a cybersecurity company that focuses on zero-trust cloud security. The technology allows finer control of the enterprise customers to grant data access to employees depending on context and content. The context dependency enhances the data security since more and more cyber-attacks implants backdoor virus in employees or collaborators' devices.
Along with the Covid-19 pandemics, the work-from-home trend exposed that the old cyber security measures can't to deal with the threat of loss/stolen/hacked remote devices.
High Growth
The company is growing fast during the last TTM and YoY. The optimistic uptrend supports the above-market stock price performance. The P/S is higher than its competitors, but the 80/20 rule tell us winner keep winning. The current valuation is based on 40% revenue YoY growth. For a software company, the revenue grow doesn't increase cost. The margin will keep increasing. The EPS estimator the next year is 103.77%
| 2020 (07/31/20) | 2019 (07/31/19) | 2018 (07/31/18) | 2017 (07/31/17) | 2016 (07/31/16) | |||||
| profit(M) | 356 | 254 | 160 | 105 | 65 | ||||
| cost(M) | 75 | 49 | 30 | 21 | 15 | ||||
| margin(%) | 0.789 | 0.807 | 0.812 | 0.8 | 0.769 |
Valuation
Compare to other growth Stocks, SZ is expensive.
Customer Concentration
Federal Government
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