Zscaler Inc. (NASDAQ: ZS) has emerged as one of the standout performers in the tech sector in 2025. The stock has skyrocketed over 72% year-to-date, trading at $313.85 as of June 27, with a market capitalization nearing $49 billion. This surge is not a result of hype but a reflection of consistent earnings beats, robust revenue growth, and strong forward guidance—signaling bullish sentiment surrounding the cybersecurity cloud platform.

Company Overview: A Leader in Zero Trust Security

Founded in 2007 by Jagtar Singh Chaudhry and headquartered in San Jose, California, Zscaler delivers cloud-native cybersecurity solutions that help enterprises securely access internet and internal applications. Its Zero Trust Exchange platform powers services like Zscaler Internet Access, Zscaler Private Access, and Zscaler Cloud Protection—positioning it at the forefront of the SaaS-based cybersecurity market.

With over 7,350 employees and a focus on securing distributed workforces, Zscaler has become a critical partner for Fortune 500 companies operating in finance, healthcare, and government sectors.

Annual Performance: EPS Growth Signals Long-Term Upside

Zscaler has delivered strong annual EPS growth, with reported earnings per share rising from $0.69 in 2022 to $1.79 in 2023, and further to $3.19 in 2024. Each year, ZS exceeded Wall Street expectations, including a 5.83% beat in 2024. Looking ahead, analysts forecast EPS to reach $3.65 in 2026, $4.45 in 2027, and $6.22 by 2028—an almost twofold increase in three years.

These projections reflect not only revenue expansion but also operational efficiency and improving margins, marking Zscaler as a high-growth player with maturing financial discipline.

Quarterly Highlights: Revenue Beats Across the Board

On a quarterly basis, Zscaler has consistently outperformed revenue estimates throughout 2025.

Q1 2025: Reported revenue of $627.96 million, beating estimates by 8%.

Q2 2025: Revenue of $647.90 million, +2.13% surprise.

Q3 2025: Revenue reached $678.03 million, topping forecasts again by 1.74%.

This consistent outperformance demonstrates healthy customer acquisition and upselling dynamics. Revenue projections continue to rise, with Q4 estimates at $706.94 million, and Q1 2026 already projected to hit $750.68 million.

Tailwinds in the Sector: Cybersecurity Demand Remains Robust

The macro environment for cybersecurity continues to strengthen as cloud adoption accelerates, hybrid workforces become the norm, and the threat landscape grows more complex. Zscaler’s Zero Trust architecture aligns perfectly with these trends, making it a natural beneficiary of long-term digital transformation initiatives.

In addition, the recurring revenue model (SaaS) provides a high degree of visibility—something investors favor, especially during periods of market volatility.

Weak Spots: EPS Still Negative on a TTM Basis

Despite impressive top-line growth and forecasted EPS expansion, Zscaler still reports a negative trailing-twelve-month EPS of -$0.25, meaning the company has yet to fully convert its accounting earnings into positive GAAP net income. Additionally, the firm pays no dividend, making it less attractive to income-focused investors.

The P/E ratio is unavailable due to current GAAP losses, but investors appear to be prioritizing forward-looking metrics such as projected free cash flow and adjusted earnings, consistent with growth-stock valuation models.

Stock Performance: ZS Breaks Out in 2025

Zscaler’s share price performance has been nothing short of stellar in 2025. The stock has gained $132.19 since the beginning of the year, equivalent to a 72.77% increase. It recently hit a new 52-week high of $317.18, driven by strong earnings reports, upward revisions in guidance, and broad interest in cybersecurity names amid AI-driven infrastructure expansion.

This breakout places ZS among the top-performing cloud software stocks this year, rivaling giants like CrowdStrike and Palo Alto Networks in both momentum and valuation.

Strategic Outlook: High Expectations and Higher Competition

Zscaler is well-positioned to capture incremental market share through innovation, including AI-enhanced threat detection, better user experience analytics, and tighter integration with public cloud vendors. The company’s global footprint is expected to expand, especially in EMEA and Asia-Pacific regions.

However, challenges remain: the cybersecurity market is highly competitive, and players like Fortinet, Microsoft, and Check Point are investing heavily. Furthermore, if interest rates remain elevated, growth stocks like ZS could face valuation pressures due to the rising cost of capital.

Final Thoughts: Zscaler Is a Growth Engine, But Not Without Risk

Zscaler’s sharp rise in 2025 is underpinned by real financial improvements—not just investor enthusiasm. With a proven ability to beat expectations and clear visibility into future growth, the company sits at the intersection of rising enterprise demand and mission-critical technology.

Still, investors should consider the broader macro backdrop and monitor profitability metrics. If the company can translate projected EPS growth into bottom-line profits, ZS may have much more room to run.