Is Zscaler Stock Built to Withstand More Downside?
Zscaler (ZS) stock is down 17.1% in 21 trading days. The recent slide reflects renewed concerns around AI threatening traditional software and slowing new customer growth, but sharp drops like this often raise a tougher question: is the weakness temporary, or a sign of deeper cracks in the story?
Before judging its downturn reslience, let’s look at where Zscaler stands today.
- Size: Zscaler is a $28 Bil company with $2.8 Bil in revenue currently trading at $177.72.
- Fundamentals: Last 12 month revenue growth of 23.2% and operating margin of -4.7%.
- Liquidity: Has Debt to Equity ratio of 0.07 and Cash to Assets ratio of 0.51
- Valuation: Zscaler stock is currently trading at P/E multiple of -686.8 and P/EBIT multiple of -1481.9
- Has returned (median) 50.6% within a year following sharp dips since 2010. See ZS Dip Buy Analysis.
These metrics point to a Strong operational performance, alongside Very High valuation – making the stock Relatively Expensive. For details, see Buy or Sell ZS Stock
That brings us to the key consideration for investors worried about this fall: how resilient is ZS stock if markets turn south? This is where our downturn resilience framework comes in. Suppose ZS stock falls another 20-30% to $124 – can investors comfortably hold on? Turns out, the stock has fared worse than the S&P 500 index during various economic downturns, based on (a) how much the stock fell and, (b) how quickly it recovered. Below, we dive deeper into each such downturn.
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2022 Inflation Shock
- ZS stock fell 76.4% from a high of $368.78 on 19 November 2021 to $87.00 on 2 May 2023 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- The stock is yet to recover to its pre-Crisis high
- The highest the stock has reached since then is $336.27 on 3 November 2025 , and currently trades at $177.72
| ZS | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -76.4% | -25.4% |
| Time to Full Recovery | Not Fully Recovered | 464 days |
2020 Covid Pandemic
- ZS stock fell 39.4% from a high of $65.18 on 20 February 2020 to $39.50 on 12 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 14 April 2020
| ZS | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -39.4% | -33.9% |
| Time to Full Recovery | 33 days | 148 days |
2018 Correction
- ZS stock fell 53.8% from a high of $88.21 on 26 July 2019 to $40.75 on 22 October 2019 vs. a peak-to-trough decline of 19.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 29 May 2020
| ZS | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -53.8% | -19.8% |
| Time to Full Recovery | 220 days | 120 days |
Feeling jittery about ZS stock? Consider portfolio approach.
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