ZS.csv

Question Number,Company background,Details,Points (Total 23),Group Ranking,Ideal Scenario for this stock,Reference/Examples,
1,Business Model (Is it a Disruptor   | Branding): Is the company name synonym with the disrupted/new process and does it have the ability to grab major market share from the conventional business process. If there are more than 5 decently sized companies trying to disrupt the business process then give .5. If more than 7 companies then give 0 as the new process has been commoditized,Values: 0 or 1 ,0.5,,,"Zscaler, Inc. operates as a cloud security company worldwide. The company offers Zscaler Internet Access solution that connect users to externally managed applications, including software-as-a-service applications and Internet destinations; and Zscaler Private Access solution, which is designed to provide access to internally managed applications, either hosted internally in data centers, and private or public clouds. Its platform includes Zscaler Central Authority, Zscaler Enforcement Node, and Zscaler Nanolog Server modules. Zscaler, Inc. serves customers in various industries, such as airlines and transportation, conglomerates, consumer goods and retail, financial services, healthcare, manufacturing, media and communications, public sector and education, technology, and telecommunications services. 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.

- Cloud security platform, built from a clean slate with over 100 patents.
- Old Model: Securing network / data centers - New Model: to securing Data/Application 
  sitting on different networks i.e. Azure, AWS etc. and users sitting in coffee shops, 
  at work.
- User connects through Business policy engine
- The top 10 competitors in Zscaler's competitive set are Check Point, Fortinet,
  Palo Alto Networks, Symantec, Juniper Networks, Cisco, FireEye, F5 Networks, 
  Pulse Secure and CrowdStrike
-Zscaler is used by more than 5,000 leading organizations, including 50 of the Fortune 500",
2,Company moat: patents | technology |difficult to replicate,"3 values: 0,.5 or 1",0.5,,,,
3,CEO/Founder: well known executive/famous for leading growth companies or successful start up cycle (started and sold min 2 companies) ,values 0 or 1,1,,,"Jay Chaudhry CEO, Chairman and Founder leverages more than 25 years of security industry expertise, including engineering, sales, marketing and management experience with leading organizations, such as IBM, NCR and Unisys. Prior to founding Zscaler in 2008, he founded and led AirDefense, a wireless security pioneer, before its acquisition by Motorola. From 2000 to 2006, Jay founded and led CipherTrust, the industry’s first email security gateway, before its merger with Secure Computing. He also founded and led CoreHarbor, a managed ecommerce solution, before it was acquired by USi/AT&T. In 1996, Jay founded and led his first company, SecureIT, the first pure-play Internet security service, before it was acquired by VeriSign in 1998.",
4,If the company is not USA based then USA based VC/Global VC should have min 25% stake in the company. Min 3 board members should be well known and respected personalities,If USA based and 3 well known  Board members then 1 : If non usa based but VC stake of min 25% and 3 well known  board members then .5,0.5,,,"https://www.crunchbase.com/

10-Q (Quaterly filing): We have experienced rapid growth in revenue, operations and employee headcount in recent periods. In addition, the number of customers, users and internet traffic on our cloud platform has increased rapidly in recent years. You should not consider our recent growth in these areas as indicative of our future performance. While we expect to continue to expand our operations and to increase our headcount significantly in the future, both domestically and internationally, our growth may not be sustainable. In particular, our recent revenue growth rates may decline in the future and may not be sufficient to achieve and sustain profitability, as we also expect our costs to increase in future periods. We believe that historical comparisons of our revenue may not be meaningful and should not be relied upon as an indication of future performance. Accordingly, you should not rely on our revenue and other growth for any prior quarter or fiscal year as an indication of our future revenue or revenue growth.

David Schneider, President, Global Customer Operations, ServiceNow
Scott Darling, President of Dell Technologies Capital (DTC)
Jay Chaudhry, CEO, Chairman and Founder",
5,(Total Addressable Market/ current rev of 5  top companies) > 7 --> 1 :if 4-7 -->.5 ,,,,,,
,Product Details,,,,,,
6,Market Share more than 50%  then give 2 points : If market share is 30-50% then give 1 else give zero,If multiple products then find out company's market share of top 2 products ,0,,,"TAM was 3.5bln in 2019. ZS total rev was 360M, share is under 10%. But it is capturing 30% of the growth in TAM for the last two years, in the new areas ",Source: BTIG's Gray Powell gpowell@btig.com
7,Usage - Frequency : [check among investment group members : If 70% have used it/company using it then give 1 point | 40-70% say yes then give -.5  else 0,,1,,,"dont know personally as I am not in the tech space, but have heard of other companies using zscaler. ",
,Growth Parameters & FInancials,,,,,,
8,Growth : previous 2 years & current year,"40%> 1, 30-40% - .5, <30% -0",1,,,"Rev growth vs prior year: 57%('17) , 51%('18), 59%('19), 37%('20)*, 29%('21)*projected",
9,Growth : Next 2 years,"40%> 1, 20-40% - .5, <20% -0",0.5,,,"BBG projects 29% and 26% in the next two years. But, this can be 1 too, given increasing growth segments and strategy of expansion in to different service areas and transformations in the market",
10,earnings growth,"40%> 1, 30-40% - .5, <30% -0",0.5,,,"BBG projection EPS growth: -33% for 2020 and +57% for 2021, +64% for 2022. Other measures like net income also project similar dip in 2020 and pickup in 2021 and 2022. earnings turned positive only in 2019. still small amount of 32mm/yr)",
11,If company (> 10 years old and > 1000 employees) or rev > 1B then give 1: if less than 10 years old and if rev between 500m-1B and employees 500-1000 then give .5,,0.5,,,"Started in 2008, Revenues < 500M & employees around 1480 (Macrotrends/Owler)",
12,International Opportunities/Ease of replication/Revenue spread across the global markets,If revenue % from the USA >70%  then give 1 if global  market exist for the product. If USA revenue between 40-70%- then give . 5 if global market exist for the product.,0.5,,,"US 51%, EMEA 40%, APAC 9 % - https://ir.zscaler.com/static-files/f2f4c074-8bce-4b71-b7a6-16d904c4d778",
,Research,,,,,,
13,"Expert Opinion : Example:  Enteprise software: Gartner, MIT Harvard, science journal, Forrester etc (take average of ranking) For Healthcare: check med / med devices magazines/websites and so on ",If the company/product rated as Top then give 1 point. If rated between 1-3 then give .5  else 0,0.5,,,https://www.zscaler.com/gartner-magic-quadrant-secure-web-gateways-2019?_bt=&_bk=zscaler%20gartner%20magic%20quadrant&_bm=e&_bn=o&_bg=1323812950037098&utm_source=bing&utm_medium=cpc&utm_campaign=google-ads-na,
14,"TipRank (Strong buy and current price lower than low estimate). Tip ranks gives 3 estimates: low, average and high",If current price lower than low estimate then 1. If current price is between low and average then .5 else 0,0,,,"Lower estimate 37, Higher estimate - 85, Tipranks - 6 Buy/6Hold/1Sell",61
15,Rule Breaker (recommended min once in the last 3 years and price not more than 2x of initial recommendation) or if total points crosses 13 then we are better than RB and give one point,"if current price is less than 2x of the initial recommendation (last 3 years max) then give 1, if current price is less than 4x and more than 2x then give .5 else give 0",0,,,Did not find it on Rule breaker,
,Shree Ganesh/Double down/All In (SG/DD/AI),,,,,,
16,"[[30-40% PS 5-8 —> SG 6-8, DD 5-6 and AI less than 5 
40-60% - PS 8-12 —> SG 10-12, DD 8-10 and AI less than 8
60-100% - 12-20]—> Varies on the company]","If lower than the lowest PS for that growth category then 2, if between lowest and lowest+2 then 1 else zero",0,,"
SG 40-50@P/S 15","The lowest price in March bottom was $42. Best case P/S = 28 based on forward earnings of $360 MM. PS =25 if forward earnings equals $400 MM based on latest quarter earnings of $100 MM in Q4. For software product companies including SAAS, there is a seasonality in the last quarter 10-15% as companies close budgets. Given COVID-19 situation, a lot of enterprises are going to reduce IT spend.",
17,Founder(s)/CEO : min 10% stake ?,"More than 10% stake then give 1 point ,  else 0",1,1,,10% ownership per fintel.io,
18,% held by Institution and Insiders > 70%,"More than 70% then 1,if between 50-70% then .5 else 0",0.5,0.5,,44 % institutional + 10% insider,
19,"Stock Price phase in conjunction with cell A27 

A
40-70 -  Best Phase 
20-40: keep an eye and start investing\ 
<20 - Value for money 
market cap < 25 Billion

B 
market cap between 25-100 billion 

C
market cap: 100 Billion + ","If A then 2 and if B then 1, If C then .5",2,2,,,
20,Short Interest less than 15% ? ,"if less than 3% then 1, if between 3 and 15 then .5 ",0.5,0.5,,Short interest % of free float 13.86%,
,Total points ,,11,,,,
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,optional points,,,,,,
,Is Initial IPO hype over: Did it correct 30-40% in the last 9 months and is revenue and EPS growth intact.(check  Lock up expiry),"If lock up expiry  is over and if it has corrected min 40% from ATH then 1 else, if corrected 20-40% then .5 else 0",,,,,
,Is IPO price min 10% more than last private valuation,If yes then 1 else 0,,,,,
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,Badly Beaten Down Growth Stock,,,,,,
,"If stock falls more than 70% of ATH. Growth still more than 30% but mismatch with analyst/company estimates (losses increased, guidance soft then go to A38",,,,,,
,"If points > 12 then given  a bonus of 5 points for the hope and reality mismatch and make an investment plan for SG, DD and AI",,,,,"Example: CLDR 5-6, FTCH 7-9, Zuora: 12-15, Carbon Black: 11-14, Uber less than 30, 2008- Banking/ETF: 2020: Airline/Cruise/Hotel/GE/BA:ETFs",
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,Exit Strategy/Options,,,,,,
,PS Doubles but revenue growth doesnt move to higher range,sell 1/3 - 1/2  or write calls,,,,,
,Falls below 50/100/200 Day moving average,Depends on person to person,,,,,
,"Stop loss : 10% below market Price if growth < 30%;if growth between 30-40% then stop loss 20%, if growth 40%+ then stop loss 30% and S&P dropped by min 10% of if S&P rose by 30% in the previous year ",,,,,,
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,Keep 50-70% for  min 3 years ,,,,,,
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,Bull's Eye Possibility,,,,,,
,If current price has been at 40% discount for more than 12 months and if growth is more than 50% and PS at the lower side of the range (D16 = 2) and D19 = 1then leaps could be taken at ATH price,,,,,,
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,References/Links,,,,,,
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,Points,,,,,,
,If 19+,Apna bana lo,,,,,
,14-18,To be or not to be :) ,,,,,
,Less than 13,Stats mein lafda hai,,,,,