Zscaler, Inc. (NASDAQ:ZS) Earnings Preview: A Mixed Financial Outlook

• Earnings per Share (EPS) is expected to decline by 14.8% year-over-year to $0.75.
• Revenue is projected to grow by 20.4% year-over-year, reaching approximately $667.1 million.
• The company's price-to-sales ratio of 16.44 indicates a premium valuation by investors.

Zscaler, Inc. (NASDAQ:ZS), a leading cloud security company, is renowned for its zero-trust security model, offering comprehensive internet security services globally. Competing with cybersecurity giants like Palo Alto Networks and Fortinet, Zscaler is gearing up for its quarterly earnings release on May 29, 2025.

Analysts are setting the stage for Zscaler's financial performance, with an anticipated earnings per share (EPS) of $0.75, marking a 14.8% decrease from the previous year. Despite the expected dip in EPS, Zscaler's revenue is on a positive trajectory, with a forecasted 20.4% increase year-over-year to $667.1 million. This growth underscores the robust demand for Zscaler's services and its solid market presence.

The revenue forecast closely matches the Zacks Consensus Estimate of $666.1 million, suggesting a steady performance. However, the projected EPS decline points towards potential profit pressures facing the company. The company's price-to-sales ratio of 16.44 reflects investor confidence, willing to pay a premium for its sales.

Zscaler's financial indicators present a nuanced view of its valuation and financial health. With an enterprise value to sales ratio of 16.22 and an enterprise value to operating cash flow ratio of 44.26, the company's valuation appears high relative to its sales and cash flow. Meanwhile, a debt-to-equity ratio of 0.77 denotes a moderate debt level, and a current ratio of 1.20 indicates sufficient liquidity to meet short-term obligations.

As the earnings report date approaches, investors and analysts alike are keen to see if Zscaler can outperform expectations. The company has a history of surpassing the Zacks Consensus Estimate, with an average earnings surprise of 24.55% over the last four quarters. The forthcoming earnings call will be pivotal in shedding light on Zscaler's future direction and management's perspective on the evolving business landscape.