VeriSign, Inc. (VRSN) vs Zscaler, Inc. (ZS)

VeriSign, Inc. and Zscaler, Inc. are both Software Infrastructure companies. Zscaler, Inc. is the larger, with a market value of $33.8B against $26.4B — 1.3× the size. Zscaler, Inc. has negative trailing earnings, so its P/E is not meaningful; VeriSign, Inc. trades at 31.1×. Zscaler, Inc. grew revenue faster over the last twelve months: 25.4% against 6.86%. VeriSign, Inc. has the higher net margin (49.8% vs −1.88%) and the higher return on invested capital (0.00% vs −10.2%). Across the 20 metrics below, VeriSign, Inc. leads on 13 and Zscaler, Inc. on 7.

Valuation

Metric VRSN ZS Software Infrastructure median
P/E 31.12 n/m 28.02
P/S 15.27 9.23 3.07
P/B n/m 11.90 3.36
Price to free cash flow 24.47 39.77 17.12
EV/EBITDA 23.32 111.98 14.91
EV/Sales 16.03 9.04 3.03
Earnings yield 3.21% (0.20%) 0.13%
Free cash flow yield 4.09% 2.51% 1.15%

Profitability

Metric VRSN ZS Software Infrastructure median
Gross margin 88.47% 76.80% 61.23%
Operating margin 67.86% (3.98%) 0.00%
Net margin 49.77% (1.88%) 0.00%
Free cash flow margin 62.42% 23.24% 1.67%
Return on equity (40.02%) (2.87%) 0.59%
Return on assets 52.95% (0.88%) 0.00%
Return on invested capital 0.00% (10.15%) 0.00%

Growth

Metric VRSN ZS Software Infrastructure median
Revenue growth (TTM) 6.86% 25.42% 13.41%
EPS growth (last fiscal year) 10.13% (44.44%) —
Revenue growth, 5-year CAGR 5.54% 37.87% 15.81%
Net income growth, 5-year CAGR 0.26% 0.00% 0.00%

Health

Metric VRSN ZS Software Infrastructure median
Debt to equity (1.04) 0.65 0.06
Current ratio 0.59 1.70 1.55
Net debt to EBITDA 1.06 (6.57) 0.08

Dividend

Metric VRSN ZS Software Infrastructure median
Dividend yield — — 1.53%
Payout ratio 0.00 0.00 0.00

Size

Metric VRSN ZS Software Infrastructure median
Market cap 26.36b 33.77b 835.96m

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