Zscaler Inc. (ZS) 10-K Red Flags
Risk signals extracted deterministically from Zscaler Inc.’s SEC 10-K/10-Q XBRL filings — no LLM, every finding cites the underlying data.
Detected red flags (14)
- Receivables outpacing revenue: Accounts receivable grew +34.7% YoY vs revenue growth of +23.3%. The +11.4% spread suggests extended credit terms, channel stuffing risk, or collection deterioration. Investigate the allowance for doubtful accounts and DSO trend.
- Material weakness in internal controls: The term "material weakness" "internal control" appears in 5 recent filing(s) (vs 2 in the prior period). This risk language is ongoing.
- Restatement of financial statements: The term "restatement of" "previously issued" appears in 4 recent filing(s) (vs 1 in the prior period). This risk language is ongoing.
- Deferred revenue growing — future revenue visibility: Deferred revenue grew +25.0% to $2.05B, providing forward revenue visibility. This is a positive leading indicator for subscription or contract-based businesses.
- Endogenous analysis: Revenue grew +23.3% but receivables grew +34.7% — the receivables-to-revenue gap suggests growth may be partially driven by extended credit terms rather than genuine demand. If DSO continues to rise, a revenue reversal or bad-debt charge could follow.
- 2 new XBRL disclosure(s) in latest filing — expanding reporting scope.
- 20 disclosure(s) dropped from prior year — reduced reporting granularity.
- Ongoing high-severity risk language: Material weakness in internal controls, Restatement of financial statements.
- Market cap $30.03B at $185.70 per share.
- FCF DCF intrinsic value ≈ $85.98 → implied downside +53.7%.
- Composite risk: Elevated.
- Leverage debt/equity 0.49 (moderate).
- Receivables outpacing revenue: Accounts receivable grew +34.7% YoY vs revenue growth of +23.3%. The +11.4% spread suggests extended credit terms, channel stuffing risk, or collection deterioration. Investigate the allowance for doubtful accounts and DSO trend.
- Material weakness in internal controls: The term "material weakness" "internal control" appears in 5 recent filing(s) (vs 2 in the prior period). This risk language is ongoing.
Filings & ownership
- Latest annual report (10-K) filed Sep 11, 2025.
- Latest quarterly report (10-Q) filed May 26, 2026.
- 9 recent 8-K material-event filings in the index.
- Recent insider Form 4s: 0 buy vs 0 sell transactions.
- ~10,000+ recent 13F-HR filings reference Zscaler Inc.; broad institutional reporting.
- Recent filers include EMJ Capital Ltd., DLD Asset Management, LP, Pasadena Private Wealth, LLC.
- 20 recent 13G passive institutional ownership notices.
Full ZS analyst report
Valuation (DCF & Graham), technicals, macro exposure, risk scorecard and 13F/13D ownership.
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