The Great Repricing Crushed This Cybersecurity Growth Stock. That's a Buying Opportunity.

Zscaler (NASDAQ: ZS) was 1 of the market's hottest cybersecurity stocks, reaching an all-time precocious of $368.78 per stock connected Nov. 19, 2021. But today, it trades astatine astir $139.

Zscaler's banal initially mislaid its luster arsenic its maturation cooled, but macro headwinds -- including rising involvement rates and geopolitical conflicts -- further compressed its valuation. Yet aft that steep sell-off, Zscaler's banal mightiness beryllium a bully contrarian play for diligent investors.

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Zscaler develops "zero trust" tools that dainty everyone, including a company's CEO, arsenic a imaginable threat. Those tools tin shield organizations from some interior and outer threats portion being integrated into larger, much diversified cybersecurity platforms.

Before Zscaler was founded successful 2007, galore organizations installed their zero-trust services connected carnal appliances -- which took up space, required on-site maintenance, and were hard to scale. Zscaler addressed those issues by launching its tools arsenic a cloud-native work that locked its users into sticky subscriptions and didn't necessitate immoderate on-site appliances. It subsequently expanded its ecosystem with further cloud-based cybersecurity tools and present serves much than 9,400 customers, including 40% of the Forbes Global 2000 companies.

From fiscal 2020 to fiscal 2025 (which ended successful July 2025), Zscaler's gross and adjusted nett income grew astatine CAGRs of 44% and 75%, respectively. However, it inactive isn't profitable by mostly accepted accounting principles (GAAP), chiefly owed to its stock-based compensation expenses and agelong streak of ecosystem-expanding acquisitions.

From fiscal 2025 to fiscal 2028, analysts expect Zscaler's gross to turn astatine a 21% CAGR. They besides expect it to crook profitable connected a GAAP ground successful the last year.

Its maturation is slowing down arsenic its concern matures. However, it's inactive expanding its AI-powered ZDX Copilot platform, deepening its integrations with different cloud-based cybersecurity platforms, and acquiring much companies to widen its moat and summation the stickiness of its platform.

At its all-time precocious successful 2021, Zscaler's marketplace headdress deed $51.7 cardinal -- oregon 47 times the $1.1 cardinal successful gross it would make successful fiscal 2022. Today, it has a marketplace headdress of $22.1 cardinal -- which is little than 7 times the $3.3 cardinal successful gross analysts expect it to make successful fiscal 2026.