Zscaler vs Microsoft Which Outperforms?

Zscaler and Microsoft are two prominent companies in the tech sector, but with different focuses. Zscaler specializes in cloud security, providing innovative solutions for protecting data and networks from online threats. Microsoft, on the other hand, is a technology giant with a diverse portfolio of products and services, including software, hardware, and cloud computing. Both companies have seen steady growth in their stock prices in recent years, making them attractive options for investors looking to capitalize on the rapidly evolving technology sector.

Zscaler or Microsoft?

When comparing Zscaler and Microsoft, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Zscaler and Microsoft.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Zscaler has a dividend yield of -%, while Microsoft has a dividend yield of 0.69%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Zscaler reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%. On the other hand, Microsoft reports a 5-year dividend growth of 10.16% year and a payout ratio of 24.63%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Zscaler P/E ratio at -846.98 and Microsoft's P/E ratio at 36.41. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Zscaler P/B ratio is 21.51 while Microsoft's P/B ratio is 11.45.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Zscaler has seen a 5-year revenue growth of 2.75%, while Microsoft's is 0.99%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Zscaler's ROE at -3.05% and Microsoft's ROE at 34.56%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $200.17 for Zscaler and $441.60 for Microsoft. Over the past year, Zscaler's prices ranged from $153.45 to $259.61, with a yearly change of 69.18%. Microsoft's prices fluctuated between $364.13 and $468.35, with a yearly change of 28.62%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.