Forensic Analysis · Technology / Software · as of Aug 9, 2026
Zscaler, Inc. (ZS)
A forensic read on Zscaler, Inc. built from its complete SEC filings — financial-health screens, earnings quality, red flags and a price-aware rating. Reproducible math, not opinion.
A · High-quality compounder
Forensic grade
Safe
Financial health
8.0
Distress distance
Clean
Earnings quality
5
Forensic signals
-349.8
P / E (ttm)
-2.3%
ROE
$27.3B
Market cap
0.00%
Dividend yield
23.3%
Revenue growth
This free snapshot doesn't read filing or proxy text, so the auditor-quality and governance checks that can lower a grade were not evaluated (red flags, auditor quality, say on pay, board independence). Those checks only ever lower a grade, so the full analysis can land below the grade above but never above it — treat it as the most favourable reading, not the settled one.
Zscaler, Inc. earns an A (High-quality compounder) forensic quality grade, and its balance-sheet distress test reads 8.0, placing it in the Safe zone. 5 forensic signals were flagged in its latest SEC filings, led by return on invested capital.
What the filings flag
-6.3%
FY2025
Return on invested capital.Return on invested capital is -6.3% in the latest fiscal year and rising from -38% — well below its ~10% cost of capital, so reinvested dollars may be destroying value, not building it.
+3.1%/yr
FY2022–FY2025
Share-count dilution.Diluted share count changed +10% over the last 3 years to FY2025 (+3.1%/yr). The count is growing: more stock was issued than repurchased over this window, so aggregate results grew faster than their per-share equivalents. That's ~3.1% shaved off per-share growth every year — total profit has to grow that much just to keep earnings-per-share flat, and a stake held since FY2022 has been diluted ~9%.
25% of rev
FY2025
Stock-based comp load.Stock-based compensation ran 25% of revenue and 82% of free cash flow in FY2025 — about $4.28 per diluted share. The cost of it is not in the cash flow — no cash left the business — it is in the count: holders gave up about 3.1% of the company a year, and that rate is not falling. That is the figure to weigh, not the share of free cash flow.
stopped
FY2019→FY2021
Shareholder returns — halted.Capital returns have STOPPED — $22,000 of buybacks + dividends in FY2019, but ~$0 in FY2021. A halt usually means the company is conserving cash.
n/m (sign flip)
FY2024→FY2025
Accruals ratio (% of NOA).Net operating assets flipped from positive to negative FY2024→FY2025 (FY2024 $+993.3M to FY2025 $-589.8M) — the standard accruals ratio divides by the average of the two, which collapses toward zero right as the sign changes, so the resulting percentage is a denominator artifact, not a real accrual measurement. Treat this as a structural balance-sheet shift to understand on its own terms rather than a clean or dirty accruals read.
Key fundamentals
Latest Revenue$2.67B
Revenue Growth YoY+23.3%
Revenue CAGR (3yr)+34.8%
Net Margin-1.6%
Free Cash Flow$808.2M
Return on Equity-2.3%
Debt / Equity0.63x
The forensic grade and screens above are free — no account needed. Want the AI investment read on top — the 0–100 rating, thesis, bull-vs-bear, red flags and the 12-month scenario, written from Zscaler, Inc.'s actual 10-K/10-Q/8-K filings?