Comprehensive Stock Comparison
Compare Zscaler, Inc. (ZS) vs Palo Alto Networks, Inc. (PANW) Stock
Analyze side-by-side fundamentals, valuation, growth, and profitability to decide which stock is the better buy.
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Quick Verdict
| Category | Winner | Why |
|---|---|---|
| Growth | ZS | 23.3% revenue growth vs PANW's 14.9% |
| Value | ZS | Lower P/E (36.8x vs 40.1x) |
| Quality / Margins | PANW | 13.0% net margin vs ZS's -2.3% |
| Stability / Safety | PANW | Beta 1.16 vs ZS's 1.27, lower leverage |
| Dividends | Tie | Neither pays a meaningful dividend |
| Momentum (1Y) | PANW | -21.8% vs ZS's -25.1% |
| Efficiency (ROA) | PANW | 5.1% ROA vs ZS's -1.0%, ROIC 17.1% vs -8.4% |
Who Each Stock Is For
Income & stability
Growth exposure
Long-term compounding (10Y)
Sleep-well-at-night portfolio
Defensive / Recession hedge
Business Model
What each company does and how it makes money
Zscaler is a cloud-native security platform that provides secure internet and private application access without traditional network hardware. It generates revenue primarily through subscription fees for its Zero Trust Exchange platform — with its core Zscaler Internet Access and Zscaler Private Access solutions driving most of its business. The company's key advantage is its massive, globally distributed cloud architecture that processes over 300 billion daily transactions, creating significant scale and data advantages that competitors cannot easily replicate.
Palo Alto Networks is a cybersecurity company that provides a comprehensive platform of security products and services to protect organizations from cyber threats. It generates revenue primarily through subscription services — which account for over 80% of total revenue — along with product sales and support contracts. The company's key advantage is its integrated security platform approach, which creates switching costs and network effects as customers adopt more of its ecosystem.
Revenue Breakdown by Segment
How each company's revenue is distributed across its business units
Financial Metrics Comparison
Side-by-side fundamentals across 2 stocks. BestLagging
Financial Scorecard
PANW leads in 4 of 6 categories (Financial Metrics, Profitability & Efficiency). ZS leads in 1 (Valuation Metrics).
Financial Metrics (TTM)
PANW is the larger business by revenue, generating $9.9B annually — 3.3x ZS's $3.0B. PANW is the more profitable business, keeping 13.0% of every revenue dollar as net income compared to ZS's -2.3%. On growth, ZS holds the edge at +25.9% YoY revenue growth, suggesting stronger near-term business momentum.
| Metric | ZSZscaler, Inc. | PANWPalo Alto Network… |
|---|---|---|
| RevenueTrailing 12 months | $3.0B | $9.9B |
| EBITDAEarnings before interest/tax | -$52M | $1.9B |
| Net IncomeAfter-tax profit | -$68M | $1.3B |
| Free Cash FlowCash after capex | $944M | $4.1B |
| Gross MarginGross profit ÷ Revenue | +76.6% | +73.5% |
| Operating MarginEBIT ÷ Revenue | -4.8% | +14.4% |
| Net MarginNet income ÷ Revenue | -2.3% | +13.0% |
| FCF MarginFCF ÷ Revenue | +31.4% | +41.1% |
| Rev. Growth (YoY)Latest quarter vs prior year | +25.9% | +14.9% |
| EPS Growth (YoY)Latest quarter vs prior year | -3.2% | +57.9% |
Valuation Metrics
| Metric | ZSZscaler, Inc. | PANWPalo Alto Network… |
|---|---|---|
| Market CapShares × price | $23.6B | $104.7B |
| Enterprise ValueMkt cap + debt − cash | $23.0B | $102.8B |
| Trailing P/EPrice ÷ TTM EPS | -544.41x | 93.08x |
| Forward P/EPrice ÷ next-FY EPS est. | 36.83x | 40.06x |
| PEG RatioP/E ÷ EPS growth rate | — | — |
| EV / EBITDAEnterprise value multiple | — | 64.78x |
| Price / SalesMarket cap ÷ Revenue | 8.83x | 11.35x |
| Price / BookPrice ÷ Book value/share | 12.61x | 13.50x |
| Price / FCFMarket cap ÷ FCF | 32.48x | 30.17x |
Profitability & Efficiency
PANW delivers a 13.6% return on equity — every $100 of shareholder capital generates $14 in annual profit, vs $-3 for ZS. PANW carries lower financial leverage with a 0.04x debt-to-equity ratio, signaling a more conservative balance sheet compared to ZS's 1.00x.
| Metric | ZSZscaler, Inc. | PANWPalo Alto Network… |
|---|---|---|
| ROE (TTM)Return on equity | -3.1% | +13.6% |
| ROA (TTM)Return on assets | -1.0% | +5.1% |
| ROICReturn on invested capital | -8.4% | +17.1% |
| ROCEReturn on capital employed | -4.6% | +8.9% |
| Piotroski ScoreFundamental quality 0–9 | 4 | 4 |
| Debt / EquityFinancial leverage | 1.00x | 0.04x |
| Net DebtTotal debt minus cash | -$592M | -$1.9B |
| Cash & Equiv.Liquid assets | $2.4B | $2.3B |
| Total DebtShort + long-term debt | $1.8B | $338M |
| Interest CoverageEBIT ÷ Interest expense | 8.97x | 1559.00x |
Total Returns (with DRIP)
A $10,000 investment in PANW five years ago would be worth $24,321 today (with dividends reinvested), compared to $6,994 for ZS. Over the past 12 months, PANW leads with a -21.8% total return vs ZS's -25.1%. The 3-year compound annual growth rate (CAGR) favors PANW at 16.5% vs ZS's 3.9% — a key indicator of consistent wealth creation.
| Metric | ZSZscaler, Inc. | PANWPalo Alto Network… |
|---|---|---|
| YTD ReturnYear-to-date | -33.4% | -17.0% |
| 1-Year ReturnPast 12 months | -25.1% | -21.8% |
| 3-Year ReturnCumulative with dividends | +12.1% | +58.1% |
| 5-Year ReturnCumulative with dividends | -30.1% | +143.2% |
| 10-Year ReturnCumulative with dividends | +345.4% | +517.2% |
| CAGR (3Y)Annualised 3-year return | +3.9% | +16.5% |
Risk & Volatility
PANW is the less volatile stock with a 1.16 beta — it tends to amplify market swings less than ZS's 1.27 beta. A beta below 1.0 means the stock typically moves less than the S&P 500. PANW currently trades 66.6% from its 52-week high vs ZS's 43.6% drawdown — a narrower gap to the peak suggests stronger recent price momentum.
| Metric | ZSZscaler, Inc. | PANWPalo Alto Network… |
|---|---|---|
| Beta (5Y)Sensitivity to S&P 500 | 1.27x | 1.16x |
| 52-Week HighHighest price in past year | $336.99 | $223.61 |
| 52-Week LowLowest price in past year | $140.56 | $139.57 |
| % of 52W HighCurrent price vs 52-week peak | +43.6% | +66.6% |
| RSI (14)Momentum oscillator 0–100 | 41.7 | 35.4 |
| Avg Volume (50D)Average daily shares traded | 1.7M | 7.9M |
Analyst Outlook
Wall Street rates ZS as "Buy" and PANW as "Buy". Consensus price targets imply 96.5% upside for ZS (target: $289) vs 41.9% for PANW (target: $211).
| Metric | ZSZscaler, Inc. | PANWPalo Alto Network… |
|---|---|---|
| Analyst RatingConsensus buy/hold/sell | Buy | Buy |
| Price TargetConsensus 12-month target | $288.85 | $211.29 |
| # AnalystsCovering analysts | 52 | 85 |
| Dividend YieldAnnual dividend ÷ price | — | — |
| Dividend StreakConsecutive years of raises | — | — |
| Dividend / ShareAnnual DPS | — | — |
| Buyback YieldShare repurchases ÷ mkt cap | 0.0% | 0.0% |
Historical Charts
Charts are rendered on first load. Hover for details.
Chart 1Total Return — 5 Years (Rebased to 100)
| Stock | Feb 20 | Feb 26 | Change |
|---|---|---|---|
| Zscaler, Inc. (ZS) | 100 | 385.86 | +285.9% |
| Palo Alto Networks,… (PANW) | 100 | 570.1 | +470.1% |
Palo Alto Networks,… (PANW) returned +143% over 5 years vs Zscaler, Inc. (ZS)'s -30%. A $10,000 investment in PANW 5 years ago would be worth $24,321 today (including dividends reinvested).
Chart 2Revenue Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Zscaler, Inc. (ZS) | $80M | $2.7B | +3227.9% |
| Palo Alto Networks,… (PANW) | $1.4B | $9.2B | +569.0% |
Zscaler, Inc.'s revenue grew from $80M (2016) to $2.7B (2025) — a 47.6% CAGR. Palo Alto Networks, Inc.'s revenue grew from $1.4B (2016) to $9.2B (2025) — a 23.5% CAGR.
Chart 3Net Margin Trend — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Zscaler, Inc. (ZS) | -34.2% | -1.6% | +95.5% |
| Palo Alto Networks,… (PANW) | -16.4% | 12.3% | +175.0% |
Zscaler, Inc.'s net margin went from -34% (2016) to -2% (2025). Palo Alto Networks, Inc.'s net margin went from -16% (2016) to 12% (2025).
Chart 4P/E Ratio History — 3 Years
| Stock | 2023 | 2025 | Change |
|---|---|---|---|
| Palo Alto Networks,… (PANW) | 230.4 | 115.1 | -50.0% |
Palo Alto Networks, Inc. has traded in a 50x–230x P/E range over 3 years; current trailing P/E is ~93x.
Chart 5EPS Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Zscaler, Inc. (ZS) | -0.98 | -0.27 | +72.4% |
| Palo Alto Networks,… (PANW) | -0.43 | 1.6 | +472.1% |
Zscaler, Inc.'s EPS grew from $-0.98 (2016) to $-0.27 (2025). Palo Alto Networks, Inc.'s EPS grew from $-0.43 (2016) to $1.60 (2025).
Chart 6Free Cash Flow — 5 Years
Zscaler, Inc. generated $727M FCF in 2025 (+406% vs 2021). Palo Alto Networks, Inc. generated $3B FCF in 2025 (+150% vs 2021).
ZS vs PANW: Frequently Asked Questions
9 questions · data-driven answers · updated daily
01Is ZS or PANW a better buy right now?
Palo Alto Networks, Inc. (PANW) offers the better valuation at 93.1x trailing P/E (40.1x forward), making it the more compelling value choice. Analysts rate Zscaler, Inc. (ZS) a "Buy" — based on 52 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.
02Which has the better valuation — ZS or PANW?
On forward P/E, Zscaler, Inc. is actually cheaper at 36.8x — notably different from the trailing picture, reflecting expected earnings growth.
03Which is the better long-term investment — ZS or PANW?
Over the past 5 years, Palo Alto Networks, Inc. (PANW) delivered a total return of +143.2%, compared to -30.1% for Zscaler, Inc. (ZS). A $10,000 investment in PANW five years ago would be worth approximately $24K today (assuming dividends reinvested). Over 10 years, the gap is even starker: PANW returned +517.2% versus ZS's +345.4%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.
04Which is safer — ZS or PANW?
By beta (market sensitivity over 5 years), Palo Alto Networks, Inc. (PANW) is the lower-risk stock at 1.16β versus Zscaler, Inc.'s 1.27β — meaning ZS is approximately 10% more volatile than PANW relative to the S&P 500. On balance sheet safety, Palo Alto Networks, Inc. (PANW) carries a lower debt/equity ratio of 4% versus 100% for Zscaler, Inc. — giving it more financial flexibility in a downturn.
05Which has better profit margins — ZS or PANW?
Palo Alto Networks, Inc. (PANW) is the more profitable company, earning 12.3% net margin versus -1.6% for Zscaler, Inc. — meaning it keeps 12.3% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: PANW leads at 13.5% versus -4.8% for ZS. At the gross margin level — before operating expenses — ZS leads at 76.9%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.
06Is ZS or PANW more undervalued right now?
On forward earnings alone, Zscaler, Inc. (ZS) trades at 36.8x forward P/E versus 40.1x for Palo Alto Networks, Inc. — 3.2x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for ZS: 96.5% to $288.85.
07Which pays a better dividend — ZS or PANW?
None of the stocks in this comparison currently pay a material dividend. All are effectively zero-yield and should be held for capital appreciation rather than income.
08Is ZS or PANW better for a retirement portfolio?
For long-horizon retirement investors, Palo Alto Networks, Inc. (PANW) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 1.16), +517.2% 10Y return). Both have compounded well over 10 years (PANW: +517.2%, ZS: +345.4%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.
09What are the main differences between ZS and PANW?
Both stocks operate in the Technology sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both. These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.
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