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    Zscaler (ZS) Could Be 35% Undervalued After Its AI Security Push

    Simply Wall St·09/11/2026 19:16:57
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    Zscaler (ZS) just rolled out its Agentic SOC product, an AI first security operations platform that uses frontier models and Zscaler telemetry to detect threats and automate containment at machine speed.

    Recent trading has been choppy for Zscaler, with the share price down 8.4% over the past month and 25.9% year to date, even after a 26.2% gain over 90 days. The 1 year total shareholder return has declined 43%, hinting that enthusiasm around new AI products like Agentic SOC is being weighed against concerns reflected in recent earnings, guidance and the new shelf registration.

    Spot fresh AI security momentum by scanning the hand picked 31 AI small caps that could sit alongside Zscaler in your watchlist.

    So is Zscaler’s slide just sentiment cooling after an AI fueled spike, or is the market starting to price in the earnings path and fresh shelf overhang more harshly?

    Most Popular Narrative: 34.6% Undervalued

    The most followed valuation story for Zscaler pegs fair value at $250 per share, well above the recent $163.48 close, which puts that narrative under the spotlight.

    My thesis is that investors may be underestimating how much AI could expand Zscaler's addressable market.

    The company already serves approximately 11,000 customers and operates one of the world's largest security clouds. Rather than relying solely on user growth, management is creating new monetization vectors tied directly to AI adoption.

    Read the complete narrative.

    Want to see what underpins that $250 figure for Zscaler? The narrative leans heavily on shifting revenue mix, margin structure, and how AI related monetization reshapes cash flows.

    If you want to connect that story to future growth, risks, and valuation in one place, the most useful next step is the To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Zscaler on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

    Result: Fair Value of $250 (UNDERVALUED)

    Have a read of the narrative in full and understand what's behind the forecasts.

    Still, the Zscaler story could be knocked off course if AI security adoption slows materially or if the fresh shelf registration further weighs on sentiment.

    Find out about the key risks to this Zscaler narrative.

    Next Steps

    Opinions are mixed on whether Zscaler is being unfairly punished or appropriately marked down for risk. Act quickly, stress test both the bullish and cautious arguments, and then weigh the 3 key rewards and 1 important warning sign.

    Looking for more investment ideas beyond Zscaler?

    If Zscaler has your attention, do not stop there. Broaden your opportunity set with a few targeted screeners that surface very different types of potential candidates.

    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.