We feel now is a pretty good time to analyse Zscaler, Inc.'s (NASDAQ:ZS) business as it appears the company may be on the cusp of a considerable accomplishment. Zscaler, Inc. operates as a cloud security company worldwide. With the latest financial year loss of US$58m and a trailing-twelve-month loss of US$36m, the US$33b market-cap company alleviated its loss by moving closer towards its target of breakeven. The most pressing concern for investors is Zscaler's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Zscaler

Zscaler is bordering on breakeven, according to the 43 American Software analysts. They expect the company to post a final loss in 2026, before turning a profit of US$17m in 2027. So, the company is predicted to breakeven approximately 2 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 40%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Zscaler's upcoming projects, but, take into account that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one issue worth mentioning. Zscaler currently has a relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Zscaler's case is 80%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of Zscaler which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Zscaler, take a look at Zscaler's company page on Simply Wall St. We've also put together a list of relevant factors you should further examine:

1. Valuation: What is Zscaler worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Zscaler is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Zscaler’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.