## **Pros:** ✅ **Zero Trust Security Leadership:** Zscaler is widely recognized as a leader in zero trust cybersecurity. Zero trust is a security model where no user or device is automatically trusted, even inside a corporate network. Zscaler’s cloud native Zero Trust Exchange platform securely connects users, devices and applications without relying on traditional network security architectures such as VPNs or perimeter based firewalls. ✅ **Pioneer in Cloud-Native Security:** Zscaler is a leader in Secure Access Service Edge (SASE) and Zero Trust network access, providing cloud-delivered security that eliminates the need for traditional firewalls and VPNs. ✅ **High-Quality Recurring Revenue Model:** Zscaler generates nearly all of its revenue through long-term subscriptions, ensuring high revenue visibility, strong dollar-based net retention rates, and scalable operating leverage ✅ **Zero Trust Architecture for AI Agent Era:** Zscaler's Zero Trust Exchange was originally designed to secure corporate networks from unauthorized human access, and it now extends natively to secure the activities of AI agents, which require the same low-latency, policy-enforced access controls across every endpoint and application. ✅ **Large Enterprises Penetration:** Zscaler counts a large portion of the Fortune 500 among its customers, securing big-ticket deals and expanding via upselling additional services like cloud firewall and data protection. ✅ **Vendor Consolidation:** The broader industry movement towards consolidating security vendors into more integrated, platform-based solutions presents a significant growth opportunity for Zscaler, by offering a comprehensive security stack. ## **Cons:** ❌ **SaaS Sector Pressure:** Many cybersecurity companies operate under the SaaS model, which has faced increasing investor scrutiny as artificial intelligence tools begin to automate tasks traditionally handled by enterprise software platforms. This broader sector pressure has affected sentiment toward several SaaS stocks. ❌ **Finances:** Although the company is growing fast, it is loss-making and relatively small. ❌ **High Valuation:** Zscaler trades at elevated valuation multiples relative to traditional cybersecurity companies, making the stock particularly vulnerable during tech sell-offs or shifts in investor sentiment. ❌ **Intense Competitive Landscape:** Companies like Palo Alto and Fortinet (also platform-based) are investing heavily in Zscaler’s core areas, intensifying competitive pressures. ❌ **Technological Risks:** The rapid pace of innovation within cybersecurity poses a constant threat, with the potential for Zscaler to lag behind emerging technologies, thereby affecting its market position.