Zscaler Stock Scales Zero Trust And AI Agent Security (NASDAQ:ZS)

Zscaler Scales Zero Trust And AI Agent Security
Feb. 23, 2026 10:23 PM ETZscaler, Inc. (ZS) Stock
Building Benjamins
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Summary
Zscaler is a compelling buy, trading at a compressed multiple, despite strong growth and a robust data moat in cloud security.
ZS benefits from high gross retention, rapid AI/data security expansion, and dominant positioning in AI-agent security, following recent acquisitions.
Short-term margin pressure and dilution from acquisitions are outweighed by long-term operating leverage and accelerating revenue growth.
Risks include aggressive competition, revenue concentration, and high stock-based compensation, but ZS’s sticky platform and upselling potential remain strong.
Investment Thesis
Zscaler (ZS) is a cloud security platform that acts as a switchboard between users and the internet. Instead of routing traffic through an on-premises firewall or VPN for remote employees, Zscaler operates on the principle of zero trust, where even
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BuildingBenjamins is a free stock picking and market commentary investment newsletter. Building Benjamins is the DBA (doing businesses as) publishing entity for Tradition Investment Management, LLC, a registered investment adviser. Benjamin Halliburton, our founder, also founded Tradition Capital Management in 2000 and was named “PSN Manager of the Decade” for All-Cap in the 2000s and “PSN Manager of the Decade” for Dividend Value in the 2010s. Since starting his investment career at Merrill Lynch in 1986, Ben has been continuously involved in investing. He managed money while earning a Master of Business Administration (MBA) with a focus on finance from Duke’s Fuqua School of Business in 1990, where he was distinguished as a Fuqua Scholar. In 1994, he earned the Chartered Financial Analyst designation. He was the top-performing portfolio manager at his firm, Brundage, Story and Rose, where his “Disciplined Growth Strategy” outperformed the S&P500 in the 1990’s bull market. Ben was the youngest partner at his firm and was called “the best investor I have ever met” by one of the senior managing partners.
Analyst’s Disclosure: I/we have a beneficial long position in the shares of ZS either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
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