ZS is now overvalued and could go down -35%

Based on our analysis, Zscaler has received an overvalued rating of 1 out of 5 stars from Cashu. This rating stems from several financial ratios that indicate the company's performance is not competitive when compared to its sector peers. One significant metric is the Price-to-Book (PB) Ratio, which stands at 21.28, while the sector average is only 3.23. A high PB ratio suggests that investors are paying a premium for the company's equity compared to its book value, indicating potential overvaluation. Furthermore, Zscaler's Return on Equity (ROE) Ratio is -4.53, compared to the sector's -24.93. While Zscaler's negative ROE is less severe than the sector average, it still indicates that the company is not effectively generating profit from shareholders’ equity. Additionally, the company's Return on Assets (ROA) Ratio is -1.23, while the sector's average is -13.93. This negative ROA signifies that Zscaler is struggling to utilize its assets to generate earnings, although it is outperforming the sector average in this regard. Lastly, the Net Profit Margin for Zscaler is -2.66, compared to the sector's -17.75. Although Zscaler's margin is less negative, it still suggests that the company is not achieving profitability. These ratios collectively indicate that Zscaler may be overvalued, as its financial performance does not justify its high market price relative to industry standards. This is not a comprehensive overview of our valuation, and should not be viewed as financial advice. Always do your own research before considering an investment.