Rotten Tomato Stocks
No Result
View All Result
  • News
    Stocks Drop in an Ugly Day as Allure Grows to Buy a Treasury Bill and Chill

    Stocks Drop in an Ugly Day as Allure Grows to Buy a Treasury Bill and Chill

    15,000 Pounds Of Smoked Sausage Recalled For ‘Bone Fragments’ After Being Shipped To Seven States

    15,000 Pounds Of Smoked Sausage Recalled For ‘Bone Fragments’ After Being Shipped To Seven States

    Asian Shares Decline Ahead of Fed Decision on Rates

    Asian Shares Decline Ahead of Fed Decision on Rates

    Canadian Food Inspection Agency orders mushroom recall for Listeria contamination

    Canadian Food Inspection Agency orders mushroom recall for Listeria contamination

  • NYSE
    Greenfire Resources Shares Fall on NYSE Debut

    Greenfire Resources Shares Fall on NYSE Debut

    Salesforce Inc. stock falls Thursday, underperforms market

    Salesforce Inc. stock falls Thursday, underperforms market

    These 4 Measures Indicate That Sempra (NYSE:SRE) Is Using Debt Extensively

    These 4 Measures Indicate That Sempra (NYSE:SRE) Is Using Debt Extensively

    Oracle (NYSE:ORCL) Takes On Some Risk With Its Use Of Debt

    Oracle (NYSE:ORCL) Takes On Some Risk With Its Use Of Debt

  • NASDAQ
    Aadi Bioscience, Inc. (NASDAQ:AADI) Short Interest Down 5.1% in August

    Aadi Bioscience, Inc. (NASDAQ:AADI) Short Interest Down 5.1% in August

    Beyond Meat Inc. stock falls Thursday, underperforms market

    Beyond Meat Inc. stock falls Thursday, underperforms market

    Brighthouse Financial Shares Fall 6.7% on Goldman Sachs Rating Cut

    Brighthouse Financial Shares Fall 6.7% on Goldman Sachs Rating Cut

    Real Good Food Revenue Falls on Tough Market Conditions in US, Europe

    Real Good Food Revenue Falls on Tough Market Conditions in US, Europe

  • OTC
    China Eastern Airlines 3Q Loss Widens on Low Travel Demand

    China Eastern Airlines 3Q Loss Widens on Low Travel Demand

    Corus Entertainment 4Q Profit Falls

    Corus Entertainment 4Q Profit Falls

    Nintendo Co. Ltd. ADR falls Monday, still outperforms market

    Nintendo Co. Ltd. ADR falls Monday, still outperforms market

    Ocado Group PLC Revenue of Ocado Retail in Q3 Fell 10.6%

    Ocado Group PLC Revenue of Ocado Retail in Q3 Fell 10.6%

  • TSX
    US Seeks to Fine Air Canada $25.5 Million Over Slow Refunds

    US Seeks to Fine Air Canada $25.5 Million Over Slow Refunds

    S&P/TSX composite falls on drop in materials sector, loonie tops 81 cents US

    S&P/TSX composite falls on drop in materials sector, loonie tops 81 cents US

    Bitcoin Is Falling: Should You Buy the Dip?

    Bitcoin Is Falling: Should You Buy the Dip?

    CN Rail Stock Is So Undervalued That it’s Absurd

    CN Rail Stock Is So Undervalued That it’s Absurd

  • News
    Stocks Drop in an Ugly Day as Allure Grows to Buy a Treasury Bill and Chill

    Stocks Drop in an Ugly Day as Allure Grows to Buy a Treasury Bill and Chill

    15,000 Pounds Of Smoked Sausage Recalled For ‘Bone Fragments’ After Being Shipped To Seven States

    15,000 Pounds Of Smoked Sausage Recalled For ‘Bone Fragments’ After Being Shipped To Seven States

    Asian Shares Decline Ahead of Fed Decision on Rates

    Asian Shares Decline Ahead of Fed Decision on Rates

    Canadian Food Inspection Agency orders mushroom recall for Listeria contamination

    Canadian Food Inspection Agency orders mushroom recall for Listeria contamination

  • NYSE
    Greenfire Resources Shares Fall on NYSE Debut

    Greenfire Resources Shares Fall on NYSE Debut

    Salesforce Inc. stock falls Thursday, underperforms market

    Salesforce Inc. stock falls Thursday, underperforms market

    These 4 Measures Indicate That Sempra (NYSE:SRE) Is Using Debt Extensively

    These 4 Measures Indicate That Sempra (NYSE:SRE) Is Using Debt Extensively

    Oracle (NYSE:ORCL) Takes On Some Risk With Its Use Of Debt

    Oracle (NYSE:ORCL) Takes On Some Risk With Its Use Of Debt

  • NASDAQ
    Aadi Bioscience, Inc. (NASDAQ:AADI) Short Interest Down 5.1% in August

    Aadi Bioscience, Inc. (NASDAQ:AADI) Short Interest Down 5.1% in August

    Beyond Meat Inc. stock falls Thursday, underperforms market

    Beyond Meat Inc. stock falls Thursday, underperforms market

    Brighthouse Financial Shares Fall 6.7% on Goldman Sachs Rating Cut

    Brighthouse Financial Shares Fall 6.7% on Goldman Sachs Rating Cut

    Real Good Food Revenue Falls on Tough Market Conditions in US, Europe

    Real Good Food Revenue Falls on Tough Market Conditions in US, Europe

  • OTC
    China Eastern Airlines 3Q Loss Widens on Low Travel Demand

    China Eastern Airlines 3Q Loss Widens on Low Travel Demand

    Corus Entertainment 4Q Profit Falls

    Corus Entertainment 4Q Profit Falls

    Nintendo Co. Ltd. ADR falls Monday, still outperforms market

    Nintendo Co. Ltd. ADR falls Monday, still outperforms market

    Ocado Group PLC Revenue of Ocado Retail in Q3 Fell 10.6%

    Ocado Group PLC Revenue of Ocado Retail in Q3 Fell 10.6%

  • TSX
    US Seeks to Fine Air Canada $25.5 Million Over Slow Refunds

    US Seeks to Fine Air Canada $25.5 Million Over Slow Refunds

    S&P/TSX composite falls on drop in materials sector, loonie tops 81 cents US

    S&P/TSX composite falls on drop in materials sector, loonie tops 81 cents US

    Bitcoin Is Falling: Should You Buy the Dip?

    Bitcoin Is Falling: Should You Buy the Dip?

    CN Rail Stock Is So Undervalued That it’s Absurd

    CN Rail Stock Is So Undervalued That it’s Absurd

No Result
View All Result
Rotten Tomato Stocks
No Result
View All Result

Is Zscaler (NASDAQ:ZS) Weighed On By Its Debt Load?

Editorial Staff by Editorial Staff
March 22, 2022
0
Is Zscaler (NASDAQ:ZS) Weighed On By Its Debt Load?

Howard Marks put it nicely when he said that, rather than worrying about share price volatility, ‘The possibility of permanent loss is the risk I worry about… and every practical investor I know worries about.’ So it might be obvious that you need to consider debt, when you think about how risky any given stock is, because too much debt can sink a company. We can see that Zscaler, Inc. (NASDAQ:ZS) does use debt in its business. But the real question is whether this debt is making the company risky.

What Risk Does Debt Bring?

Debt assists a business until the business has trouble paying it off, either with new capital or with free cash flow. If things get really bad, the lenders can take control of the business. While that is not too common, we often do see indebted companies permanently diluting shareholders because lenders force them to raise capital at a distressed price. Of course, plenty of companies use debt to fund growth, without any negative consequences. The first step when considering a company’s debt levels is to consider its cash and debt together.

How Much Debt Does Zscaler Carry?

You can click the graphic below for the historical numbers, but it shows that as of January 2022 Zscaler had US$940.7m of debt, an increase on US$887.2m, over one year. But on the other hand it also has US$1.62b in cash, leading to a US$680.5m net cash position.

debt-equity-history-analysis
NasdaqGS:ZS Debt to Equity History March 21st 2022

How Healthy Is Zscaler’s Balance Sheet?

Zooming in on the latest balance sheet data, we can see that Zscaler had liabilities of US$836.0m due within 12 months and liabilities of US$1.05b due beyond that. Offsetting this, it had US$1.62b in cash and US$271.8m in receivables that were due within 12 months. So these liquid assets roughly match the total liabilities.

This state of affairs indicates that Zscaler’s balance sheet looks quite solid, as its total liabilities are just about equal to its liquid assets. So while it’s hard to imagine that the US$31.4b company is struggling for cash, we still think it’s worth monitoring its balance sheet. Succinctly put, Zscaler boasts net cash, so it’s fair to say it does not have a heavy debt load! There’s no doubt that we learn most about debt from the balance sheet. But it is future earnings, more than anything, that will determine Zscaler’s ability to maintain a healthy balance sheet going forward.

In the last year Zscaler wasn’t profitable at an EBIT level, but managed to grow its revenue by 60%, to US$860m. Shareholders probably have their fingers crossed that it can grow its way to profits.

So How Risky Is Zscaler?

While Zscaler lost money on an earnings before interest and tax (EBIT) level, it actually generated positive free cash flow US$196m. So taking that on face value, and considering the net cash situation, we don’t think that the stock is too risky in the near term. Keeping in mind its 60% revenue growth over the last year, we think there’s a decent chance the company is on track. We’d see further strong growth as an optimistic indication. There’s no doubt that we learn most about debt from the balance sheet.

Related Posts

Aadi Bioscience, Inc. (NASDAQ:AADI) Short Interest Down 5.1% in August
NASDAQ

Aadi Bioscience, Inc. (NASDAQ:AADI) Short Interest Down 5.1% in August

September 21, 2023
Beyond Meat Inc. stock falls Thursday, underperforms market
NASDAQ

Beyond Meat Inc. stock falls Thursday, underperforms market

September 21, 2023
Brighthouse Financial Shares Fall 6.7% on Goldman Sachs Rating Cut
NASDAQ

Brighthouse Financial Shares Fall 6.7% on Goldman Sachs Rating Cut

September 21, 2023
Real Good Food Revenue Falls on Tough Market Conditions in US, Europe
NASDAQ

Real Good Food Revenue Falls on Tough Market Conditions in US, Europe

September 21, 2023
Load More
Next Post
GoPro Inc. stock falls Monday, underperforms market

GoPro Inc. stock falls Monday, underperforms market

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

I agree to the Terms & Conditions and Privacy Policy.

POPULAR NEWS

CNH Industrial (NYSE:CNHI) Use Of Debt Could Be Considered Risky

CNH Industrial (NYSE:CNHI) Use Of Debt Could Be Considered Risky

April 14, 2021
CN Rail Stock Is So Undervalued That it’s Absurd

CN Rail Stock Is So Undervalued That it’s Absurd

May 2, 2021
Corus Entertainment 4Q Profit Falls

Corus Entertainment 4Q Profit Falls

October 22, 2021
Bitcoin Is Falling: Should You Buy the Dip?

Bitcoin Is Falling: Should You Buy the Dip?

May 3, 2021
US Seeks to Fine Air Canada $25.5 Million Over Slow Refunds

US Seeks to Fine Air Canada $25.5 Million Over Slow Refunds

June 17, 2021

EDITOR'S PICK

Dollar Tree Inc. stock falls Thursday, underperforms market

Dollar Tree Inc. stock falls Thursday, underperforms market

August 11, 2022
Is Workiva (NYSE:WK) Using Debt In A Risky Way?

Is Workiva (NYSE:WK) Using Debt In A Risky Way?

June 13, 2023
Celanese (NYSE:CE) Earns Downgrade Rating from 22nd Century Group

Celanese (NYSE:CE) Earns Downgrade Rating from 22nd Century Group

July 2, 2023
Does Astronics (NASDAQ:ATRO) Have A Healthy Balance Sheet?

Does Astronics (NASDAQ:ATRO) Have A Healthy Balance Sheet?

September 17, 2021

Stay Updated

Get breaking news delivered straight into your inbox

Nothing in this publication should be considered as personalized financial advice. We are not licensed under securities laws to address your particular financial situation. No communication by our employees to you should be deemed as personalized financial advice. Please consult a licensed financial advisor before making any investment decision. This is a paid advertisement and is neither an offer nor recommendation to buy or sell any security. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this report or email is not provided to any individual with a view toward their individual circumstances. Rotten Tomato stocks is a wholly-owned subsidiary of Grainne Capital Limited.
While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our newsletter is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between the any predictions and actual results. Always consult a licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment.

Rotten Tomato Stocks cover the companies and markets that are declining, failing or headed for disaster. We help investors spot the down tends and recognize when something smells rotten.

RECENT POSTS

Stocks Drop in an Ugly Day as Allure Grows to Buy a Treasury Bill and Chill

Greenfire Resources Shares Fall on NYSE Debut

Salesforce Inc. stock falls Thursday, underperforms market

POPULAR POSTS

These 4 Measures Indicate That Sempra (NYSE:SRE) Is Using Debt Extensively

Aadi Bioscience, Inc. (NASDAQ:AADI) Short Interest Down 5.1% in August

Beyond Meat Inc. stock falls Thursday, underperforms market

© Copyright 2023 RottenTomatoStocks. All Rights Reserved 

Disclaimer | Privacy Policy

No Result
View All Result
  • HOME
  • NEWS
  • NYSE
  • NASDAQ
  • OTC
  • TSX

© 2021 RottenTomatoStocks.com

error: Content is protected !!
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.