Reviewing Zscaler (NASDAQ:ZS) & BOX (NYSE:BOX)

BOX (NYSE:BOX) and Zscaler (NASDAQ:ZS) are both technology companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, valuation, dividends, institutional ownership, profitability, earnings and risk.

Profitability

This table compares BOX and Zscaler’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BOX	10.59%	-20.97%	4.47%
Zscaler	-1.88%	1.23%	0.40%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for BOX and Zscaler, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BOX	1	4	3	0	2.25
Zscaler	1	8	36	0	2.78

BOX currently has a consensus target price of $37.80, indicating a potential downside of 14.06%. Zscaler has a consensus target price of $236.65, indicating a potential upside of 5.44%. Given Zscaler’s stronger consensus rating and higher probable upside, analysts clearly believe Zscaler is more favorable than BOX.

Earnings and Valuation

This table compares BOX and Zscaler”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BOX	$1.18 billion	5.13	$115.38 million	$0.69	63.74
Zscaler	$3.35 billion	10.92	-$63.18 million	($0.39)	-575.49

BOX has higher earnings, but lower revenue than Zscaler. Zscaler is trading at a lower price-to-earnings ratio than BOX, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

86.7% of BOX shares are owned by institutional investors. Comparatively, 46.5% of Zscaler shares are owned by institutional investors. 4.0% of BOX shares are owned by company insiders. Comparatively, 17.2% of Zscaler shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Volatility & Risk

BOX has a beta of 0.65, suggesting that its stock price is 35% less volatile than the S&P 500. Comparatively, Zscaler has a beta of 0.82, suggesting that its stock price is 18% less volatile than the S&P 500.

Summary

Zscaler beats BOX on 8 of the 14 factors compared between the two stocks.

About BOX

Box, Inc. engages in the provision of an enterprise content platform that enables organizations to securely manage enterprise content while allowing easy, secure access and sharing of this content from anywhere, on any device. Its products include cloud content management, IT and admin controls, Box Governance, Box Zones, Box Relay, Box Shuttle, and Box KeySafe. The company was founded by Aaron Levie, Dylan Smith, Jeff Queisser, and Sam Ghods in March 2005 and is headquartered in Redwood City, CA.

About Zscaler

Zscaler, Inc. operates as a cloud security company worldwide. The company offers Zscaler Internet Access solution that provides users, workloads, IoT, and OT devices secure access to externally managed applications, including software-as-a-service (SaaS) applications and internet destinations; and Zscaler Private Access solution, which is designed to provide access to managed applications hosted internally in data centers, and private or public clouds. It also provides Zscaler Digital Experience that measures end-to-end user experience across business applications, as well as provides an easy-to-understand digital experience score for each user, application, and location within an enterprise. In addition, the company offers Posture Control solutions comprising Cloud Security Posture Management that identifies and remediates application misconfigurations in SaaS, infrastructure as a service, and PaaS to reduce risk and ensure compliance with industry and organizational benchmarks; Cloud Infrastructure Entitlement Management that detects and remediates excessive or unused cloud permissions and enforces least privileged access without disrupting productivity; Infrastructure as Code (IaC), which analyzes IaC templates to identify misconfigurations and other security issues prior to deployment to cloud infrastructure; and Vulnerability Scanning and Data Loss Prevention solutions. Its platform modules include Zscaler Central Authority, Zscaler Enforcement Node, and Zscaler Log Servers. The company serves customers in airlines and transportation, conglomerates, consumer goods and retail, financial services, healthcare, manufacturing, media and communications, public sector and education, technology, and telecommunications services industries. The company was formerly known as SafeChannel, Inc., and changed its name to Zscaler, Inc. in August 2008. Zscaler, Inc. was incorporated in 2007 and is headquartered in San Jose, California.