Zscaler Partners with IBM and Red Hat to Boost Cybersecurity
On October 5, 2026, Zscaler Inc (NASDAQ: ZS) announced a new partnership with IBM and Red Hat to strengthen the security of private applications during the critical period between vulnerability disclosure and patch deployment. This collaboration aims to mitigate the rising threat of AI-driven cyberattacks, which are increasingly exploiting vulnerabilities faster than traditional defenses can respond. Zscaler’s solution focuses on rapid exposure discovery and application-specific protection, providing a temporary shield until permanent fixes are implemented.
Zscaler operates a zero-trust exchange platform delivered via software-as-a-service, offering solutions like Zscaler Internet Access and Zscaler Private Access. The company serves a diverse client base, including large enterprises and government agencies across various industries. Despite its strong market presence, Zscaler’s valuation metrics reflect market skepticism. Its Price-to-Sales (P/S) ratio stands at 9.43, significantly below its historical median of 18.94, indicating cautious investor sentiment regarding its near-term growth prospects.
The company’s GF Score™ of 72/100 highlights its robust growth potential, with a growth rank of 9/10, supported by a 23.3% revenue growth over three years. However, profitability remains a challenge, with negative operating margins and a low profitability rank of 3/10. Insider activity over the past 12 months has been exclusively selling, totaling $17.8 million in shares sold, signaling cautious internal sentiment despite institutional ownership exceeding 51%. GuruFocus’ GF Value™ metric estimates Zscaler’s intrinsic value at $295.97 per share, roughly 33.4% above the current market price of $197.00, though this should be interpreted with caution due to the company’s loss-making status.
Investors considering Zscaler should weigh these factors carefully, recognizing the speculative growth nature of the stock. The mixed guru ownership and persistent insider selling underscore uncertainty around the company’s near-term prospects. While the GF Value™ suggests potential undervaluation, the absence of meaningful earnings and negative margins mean traditional valuation metrics are not applicable, requiring investors to rely on cash flow trends and qualitative factors.