Zscaler Inc.’s ZS Zero Trust Everywhere strategy is becoming an important growth driver as enterprises look to secure users, cloud workloads and branch locations through a single platform. Instead of relying on multiple security products, customers are increasingly adopting Zscaler’s integrated Zero Trust architecture, creating more opportunities for the company to expand revenues from existing accounts.
The adoption trend is gaining momentum. At the end of the third quarter of fiscal 2026, Zscaler had more than 700 Zero Trust Everywhere enterprise customers, up from more than 550 in the previous quarter. These customers use the company’s Zero Trust Users, Zero Trust Cloud and Zero Trust Branch solutions together, reflecting broader platform adoption across organizations.
This strategy is also encouraging larger customer commitments. During the quarter, Zscaler reported annual recurring revenues (ARR) of more than $3.5 billion, up 25% year over year, while remaining performance obligations increased roughly 30% to about $6.5 billion. The company also closed a record number of new annual contract value deals worth more than $1 million during the third quarter.
Customer success stories highlight the opportunity. A healthcare technology company initially sought user security but later expanded its deployment to include Zero Trust Cloud, Zero Trust Branch and multiple data security modules. Existing customers are also increasing spending as they broaden platform adoption.
As cyber threats become more sophisticated and AI workloads continue to grow, enterprises are looking for unified security platforms rather than standalone products. With its expanding Zero Trust Everywhere customer base and strong cross-selling opportunities, Zscaler appears well-positioned to drive sustained revenue growth in the coming years. The Zacks Consensus Estimate for fiscal 2026 and 2027 revenues indicates year-over-year growth of 24.6% and 17.2%, respectively.
How Do Zscaler’s Rivals Compare in Platform Adoption?
Cybersecurity companies pursuing a similar platform expansion strategy are Palo Alto Networks, Inc. PANW and Fortinet, Inc. FTNT.
Palo Alto Networks has been driving its platformization strategy by encouraging enterprises to replace multiple point products with its integrated security platform. In the third quarter of fiscal 2026, the company generated more than $3 billion in revenues, up 31% year over year, while next-generation security ARR climbed 60% to $8.13 billion. Its broad portfolio across network security, cloud security and security operations enables customers to consolidate vendors, increasing cross-selling opportunities and recurring revenues.
Fortinet is also expanding its unified cybersecurity platform through Secure Networking, Unified SASE and Security Operations solutions. In the first quarter of 2026, the company reported revenues of approximately $1.85 billion, up 20% year over year, while Unified SASE billings rose 23%. Fortinet continues to benefit as enterprises modernize branch security and adopt integrated security architectures.
Zscaler’s Price Performance, Valuation & Estimates
ZS shares have plunged 33.3% year to date against the Zacks Security industry’s surge of 73.5%.
Zscaler YTD Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, ZS trades at a forward price-to-sales ratio of 6.24, significantly below the industry’s average of 19.35.
Zscaler Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Zscaler’s fiscal 2026 and 2027 earnings implies a year-over-year increase of 26.2% and 10.6%, respectively. Estimates for fiscal 2026 and 2027 have been revised upward over the past 60 days.
Image Source: Zacks Investment Research
Zscaler currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).