NetApp, Inc. (NTAP) vs Zscaler, Inc. (ZS)

NetApp, Inc. and Zscaler, Inc. are both Software Infrastructure companies. NetApp, Inc. is the larger, with a market value of $38.8B against $33.8B — 1.1× the size. Zscaler, Inc. has negative trailing earnings, so its P/E is not meaningful; NetApp, Inc. trades at 28.0×. Zscaler, Inc. grew revenue faster over the last twelve months: 25.4% against 12.2%. NetApp, Inc. has the higher net margin (19.2% vs −1.88%) and the higher return on invested capital (283.9% vs −10.2%). Across the 21 metrics below, NetApp, Inc. leads on 13 and Zscaler, Inc. on 8.

Valuation

Metric NTAP ZS Software Infrastructure median
P/E 28.02 n/m 28.02
P/S 5.33 9.23 3.07
P/B 26.37 11.90 3.36
Price to free cash flow 23.89 39.77 17.12
EV/EBITDA 18.88 111.98 14.91
EV/Sales 5.19 9.04 3.03
Earnings yield 3.57% (0.20%) 0.13%
Free cash flow yield 4.19% 2.51% 1.15%

Profitability

Metric NTAP ZS Software Infrastructure median
Gross margin 70.63% 76.80% 61.23%
Operating margin 25.02% (3.98%) 0.00%
Net margin 19.19% (1.88%) 0.00%
Free cash flow margin 22.32% 23.24% 1.67%
Return on equity 114.82% (2.87%) 0.59%
Return on assets 13.74% (0.88%) 0.00%
Return on invested capital 283.94% (10.15%) 0.00%

Growth

Metric NTAP ZS Software Infrastructure median
Revenue growth (TTM) 12.15% 25.42% 13.41%
EPS growth (last fiscal year) 11.99% (44.44%) —
Revenue growth, 5-year CAGR 3.81% 37.87% 15.81%
Net income growth, 5-year CAGR 11.82% 0.00% 0.00%

Health

Metric NTAP ZS Software Infrastructure median
Debt to equity 1.66 0.65 0.06
Current ratio 1.24 1.70 1.55
Net debt to EBITDA (0.59) (6.57) 0.08

Dividend

Metric NTAP ZS Software Infrastructure median
Dividend yield 2.25% — 1.53%
Payout ratio 0.36 0.00 0.00

Size

Metric NTAP ZS Software Infrastructure median
Market cap 38.75b 33.77b 835.96m

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