Block, Inc. (XYZ) vs Zscaler, Inc. (ZS)

Block, Inc. and Zscaler, Inc. are both Software Infrastructure companies. Block, Inc. is the larger, with a market value of $46.1B against $33.8B — 1.4× the size. Zscaler, Inc. has negative trailing earnings, so its P/E is not meaningful; Block, Inc. trades at 132×. Zscaler, Inc. grew revenue faster over the last twelve months: 25.4% against 5.07%. Block, Inc. has the higher net margin (1.43% vs −1.88%) and the higher return on invested capital (3.43% vs −10.2%). Across the 21 metrics below, Block, Inc. leads on 14 and Zscaler, Inc. on 7.

Valuation

Metric XYZ ZS Software Infrastructure median
P/E 131.76 n/m 28.02
P/S 1.82 9.23 3.07
P/B 2.08 11.90 3.36
Price to free cash flow 11.77 39.77 17.12
EV/EBITDA 130.77 111.98 14.91
EV/Sales 1.86 9.04 3.03
Earnings yield 0.76% (0.20%) 0.13%
Free cash flow yield 8.49% 2.51% 1.15%

Profitability

Metric XYZ ZS Software Infrastructure median
Gross margin 46.36% 76.80% 61.23%
Operating margin 4.67% (3.98%) 0.00%
Net margin 1.43% (1.88%) 0.00%
Free cash flow margin 15.50% 23.24% 1.67%
Return on equity 1.62% (2.87%) 0.59%
Return on assets 0.94% (0.88%) 0.00%
Return on invested capital 3.43% (10.15%) 0.00%

Growth

Metric XYZ ZS Software Infrastructure median
Revenue growth (TTM) 5.07% 25.42% 13.41%
EPS growth (last fiscal year) (53.95%) (44.44%) —
Revenue growth, 5-year CAGR 20.56% 37.87% 15.81%
Net income growth, 5-year CAGR 43.70% 0.00% 0.00%

Health

Metric XYZ ZS Software Infrastructure median
Debt to equity 0.26 0.65 0.06
Current ratio 2.21 1.70 1.55
Net debt to EBITDA 0.22 (6.57) 0.08

Dividend

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

Size

Metric XYZ ZS Software Infrastructure median
Market cap 46.11b 33.77b 835.96m

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