📊 AI Stock Rating — Summary

For the quarter ending October 31, 2025, ZS reported revenue of $788.1 million and a net loss of $11.6 million, resulting in an EPS of -$0.07. Despite the negative net margin, free cash flow reached a robust $448.3 million, indicating strong cash generation capabilities. Revenues grew year-over-year, showcasing a positive trajectory, although profitability remains a concern with continued net losses. The company sustains a solid balance sheet with total assets at approximately $6.5 billion against liabilities of $4.5 billion, leading to an equity base of $2 billion. Notably, ZS maintains a net debt position of $495.8 million. Cash flow quality is supported by substantial operating cash flow and minimal capital expenditures, translating to impressive FCF figures. ZS does not currently offer dividends or undertake stock repurchases, focusing instead on reinvestment for growth. The stock's valuation provides a potential upside according to analyst price targets, suggesting optimism among analysts. ZS's shareholder return score is primarily driven by market appreciation opportunities, given the absence of direct payouts.

AI Score Breakdown

Revenue Growth — Score: 8/10

ZS demonstrates strong revenue growth, though stability is tempered by ongoing losses. Revenue reached $788 million, indicating robust year-over-year growth. Main drivers include increased demand and market expansion efforts.

Profitability — Score: 4/10

The company currently operates at a loss, with an EPS of -$0.07. While revenue growth is evident, high expenses suppress profitability, necessitating improvements in efficiency.

Cash Flow Quality — Score: 9/10

ZS boasts excellent cash flow quality, with free cash flow matching operating cash flow at $448 million thanks to zero capital expenditure, underscoring strong liquidity.

Leverage & Balance Sheet — Score: 6/10

ZS has a moderate net debt position of $495.8 million. Assets substantially cover liabilities, but leverage slightly impacts overall financial flexibility.

Shareholder Returns — Score: 5/10

Without dividends or buybacks, shareholder returns rest on price appreciation. Given no explicit price data for the 1-year period, mid-range scores reflect uncertainty and market potential.

Analyst Sentiment & Valuation — Score: 7/10

Analyst sentiment appears optimistic with price targets reaching up to $360, suggesting potential for price appreciation. Valuation relative to targets implies possible upside at this time.

⚠ AI-generated — informational only, not financial advice.