Zscaler - owner earnings plus net cash (FY2026 actuals; owner earnings turned negative on capex surge)

Zscaler Inc. (ZS)

By@anthropopithecus

Assumptions as of 2026-09-03

USD

Updated Sep 3, 2026 · Revised 1 time

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Zscaler - owner earnings plus net cash (FY2026 actuals; owner earnings turned negative on capex surge)

as of 2026-09-03

Fair value per share

$6.89

Upside to market

-96.1%

Net cash per share

$10.98

Justified multiple of owner earnings

15.4

Cash plus short-term investments (2026-07-31)

3,474.15$M

Annual relative growth decay

15.0%

Discount rate

10.0%

Entry growth (FY2027 guided 16.6-17.5% incl. Red Canary)

17.0%

FCF margin (OCF less capex less capitalized software; FY2026 actual)

23.2%

GAAP gross margin (FY2026 actual)

76.8%

Market price

$177.80

FY2026 actual revenue (ended 2026-07-31)

3,352.52$M

SBC as pct of revenue (cash-flow SBC line, FY2026 actual)

24.5%

Weighted-average diluted shares (GAAP, FY2026)

161.87M

Terminal multiple cap

18.00

Convertible senior notes (2026-07-31)

1,696.36$M

Total multiple cap

45.00

Owner earnings bridge ($M)

	FY2026A
Revenue (FY2026 actual)	3,353
FCF margin	23.2%
less SBC pct	24.5%
= Owner margin	-1.3%
= Owner earnings	-43
Justified multiple	15.4
= Enterprise value	-663
plus net cash	1,778
= Equity value	1,115
Market pays (x owner earnings)	-629.3

Sources

— sec.gov
— sec.gov

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