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Zscaler vs. Fortinet: Which Cybersecurity Stock Is the Better Buy?
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Key Takeaways
FTNT Q1 revenues rose 20% to $1.85B, while billings and non-GAAP EPS soared 31% and 41%, respectively.
Analysts raised Fortinet's 2026 earnings estimates 4.7% over 60 days and 2027 by 3.05%.
FTNT's Q1 2026 adjusted free cash flow margin reached 58%, among the best in cybersecurity.
Zscaler, Inc. (ZS - Free Report) and Fortinet, Inc. (FTNT - Free Report) are among the biggest beneficiaries of the growing need for cloud and network security as enterprises accelerate artificial intelligence (AI) adoption and digital transformation.
Both companies are gaining from the rising popularity of zero-trust security and SASE architectures, but they approach the market differently. Zscaler focuses on a cloud-native zero-trust platform, while Fortinet combines firewall dominance with integrated networking and security offerings.
As enterprises increase spending to secure AI workloads, cloud applications and distributed networks, investors might be wondering which stock offers the stronger long-term opportunity at current levels.
The Case for Zscaler Stock
Zscaler continues to strengthen its position as a leading zero-trust cybersecurity provider. The company delivered solid fiscal second-quarter 2026 results, with revenues rising nearly 26% year over year to $815.8 million, and non-GAAP earnings per share (EPS) soaring 29.5% to $1.01. The company also reported strong demand for AI-security offerings, Zero Trust Everywhere and Data Security Everywhere solutions and led annual recurring revenues, climbing 25% year over year to $3.4 billion.
During the last earnings release, management noted that AI adoption is significantly expanding cybersecurity demand because enterprises need to secure AI agents, applications and machine-to-machine communication. Zscaler’s Zero Trust Exchange platform is emerging as a key differentiator. The company processed nearly 1 trillion AI transactions in calendar year 2025 and highlighted rapid growth in AI Protect solutions.
Zscaler is also seeing healthy customer expansion. The number of “Zero Trust Everywhere” enterprise customers increased to more than 550 from around 130 a year ago. The company continues to win large deals from financial services, semiconductor and retail customers, showing that enterprises are increasingly replacing traditional firewall-based architectures with Zscaler’s cloud-native approach.
Its Agentic Operations platform is also gaining traction and could become a major contributor to AI Security ARR in fiscal 2026. The integration of Red Canary’s AI capabilities further strengthens Zscaler’s AI-powered security operations platform and improves its positioning in the enterprise cybersecurity market.
Another important growth driver is the company’s Z-Flex program, which is helping it secure larger multi-year contracts. Introduced in the third quarter of fiscal 2025, the program generated more than $290 million in total contract value bookings in the second quarter of fiscal 2026, marking a strong 65% sequential increase. Z-Flex allows customers to adopt multiple products gradually under a predictable pricing structure, making long-term platform adoption easier. This strategy not only increases customer stickiness but also improves revenue visibility.
However, Zscaler still faces challenges. Its operating margin of around 22% and free cash flow margin of roughly 21% remain below Fortinet’s levels. The company also continues to spend aggressively on innovation and customer acquisition, which could pressure margins if macroeconomic conditions weaken. Zscaler’s growth increasingly depends on large enterprise spending and successful adoption of newer AI-security offerings, which are still in the early stages.
The Case for Fortinet Stock
Fortinet remains one of the most diversified cybersecurity companies in the market. The company started on a strong note by reporting outstanding first-quarter results, wherein revenues soared 20% to $1.85 billion, while non-GAAP EPS jumped 41% to 82 cents. Billings rose 31% year over year to $2.09 billion. Large enterprise demand remained particularly strong, with the value of deals above $1 million rising more than 60%.
A major strength for Fortinet is its integrated platform strategy. The company combines networking and security products through its FortiOS operating system, enabling customers to deploy firewall, SD-WAN, SASE and AI-driven security operations on a single platform. This simplifies operations and lowers total ownership costs for enterprises. Fortinet’s proprietary ASIC chips also provide better performance and energy efficiency compared with many competitors.
Fortinet is benefiting from rising AI infrastructure spending as enterprises deploy AI-ready data centers and secure operational technology environments. The company’s OT security billings grew more than 70% in the first quarter of 2026, while Unified SASE billings rose 31%. The company is also expanding rapidly in AI-driven security operations and sovereign SASE solutions.
Fortinet’s profitability is better than Zscaler’s. In the first quarter of 2026, the company generated a non-GAAP operating margin of nearly 36% and an adjusted free cash flow margin of 58%, among the best in the cybersecurity industry.
ZS vs. FTNT: What Does the Estimate Revision Trend Suggest?
The earnings estimate revision trend for the two companies indicates that analysts are becoming more bullish toward FTNT stock. Analysts have raised their estimates for Fortinet’s 2026 earnings by 4.7% over the last 60 days, while by 3.05% for 2027 over the same time frame.
Fortinet Earnings Estimate Revision Trend
Image Source: Zacks Investment Research
In contrast, estimates for Zscaler’s fiscal 2026 and 2027 earnings have remained unchanged over the past 60 days.
Zscaler Earnings Estimate Revision Trend
Image Source: Zacks Investment Research
Zscaler vs. Fortinet: Price Performance and Valuation
Over the past year, shares of Zscaler have plunged 30.6%, while Fortinet soared 20.9%.
Image Source: Zacks Investment Research
On the valuation front, Fortinet trades at 11.52 times forward sales compared to 7.33 times for Zscaler. While Fortinet looks more expensive, its positive earnings estimate revisions justify the premium. Zscaler’s lower valuation reflects its risks, including aggressive spending on innovation and customer acquisition, as well as a lower margin profile than Fortinet.
Image Source: Zacks Investment Research
Final Take: Fortinet Is a Smarter Buy Right Now
Both Zscaler and Fortinet are well-positioned to benefit from rising cybersecurity spending, AI adoption and the growing shift toward zero-trust architectures. Zscaler offers stronger growth and an innovative cloud-native platform that could deliver significant upside over the long term.
However, Fortinet appears to be the better investment option right now. Its diversified platform, strong enterprise momentum, expanding AI and SASE opportunities, industry-leading margins and massive free cash flow generation provide a more balanced risk-reward profile. Despite trading at a richer valuation multiple, Fortinet’s consistent execution and upward earnings estimate revisions make it a more attractive cybersecurity stock for investors seeking stability and long-term growth.
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Zscaler vs. Fortinet: Which Cybersecurity Stock Is the Better Buy?
Key Takeaways
Zscaler, Inc. (ZS - Free Report) and Fortinet, Inc. (FTNT - Free Report) are among the biggest beneficiaries of the growing need for cloud and network security as enterprises accelerate artificial intelligence (AI) adoption and digital transformation.
Both companies are gaining from the rising popularity of zero-trust security and SASE architectures, but they approach the market differently. Zscaler focuses on a cloud-native zero-trust platform, while Fortinet combines firewall dominance with integrated networking and security offerings.
As enterprises increase spending to secure AI workloads, cloud applications and distributed networks, investors might be wondering which stock offers the stronger long-term opportunity at current levels.
The Case for Zscaler Stock
Zscaler continues to strengthen its position as a leading zero-trust cybersecurity provider. The company delivered solid fiscal second-quarter 2026 results, with revenues rising nearly 26% year over year to $815.8 million, and non-GAAP earnings per share (EPS) soaring 29.5% to $1.01. The company also reported strong demand for AI-security offerings, Zero Trust Everywhere and Data Security Everywhere solutions and led annual recurring revenues, climbing 25% year over year to $3.4 billion.
Zscaler, Inc. Price, Consensus and EPS Surprise
Zscaler, Inc. price-consensus-eps-surprise-chart | Zscaler, Inc. Quote
During the last earnings release, management noted that AI adoption is significantly expanding cybersecurity demand because enterprises need to secure AI agents, applications and machine-to-machine communication. Zscaler’s Zero Trust Exchange platform is emerging as a key differentiator. The company processed nearly 1 trillion AI transactions in calendar year 2025 and highlighted rapid growth in AI Protect solutions.
Zscaler is also seeing healthy customer expansion. The number of “Zero Trust Everywhere” enterprise customers increased to more than 550 from around 130 a year ago. The company continues to win large deals from financial services, semiconductor and retail customers, showing that enterprises are increasingly replacing traditional firewall-based architectures with Zscaler’s cloud-native approach.
Its Agentic Operations platform is also gaining traction and could become a major contributor to AI Security ARR in fiscal 2026. The integration of Red Canary’s AI capabilities further strengthens Zscaler’s AI-powered security operations platform and improves its positioning in the enterprise cybersecurity market.
Another important growth driver is the company’s Z-Flex program, which is helping it secure larger multi-year contracts. Introduced in the third quarter of fiscal 2025, the program generated more than $290 million in total contract value bookings in the second quarter of fiscal 2026, marking a strong 65% sequential increase. Z-Flex allows customers to adopt multiple products gradually under a predictable pricing structure, making long-term platform adoption easier. This strategy not only increases customer stickiness but also improves revenue visibility.
However, Zscaler still faces challenges. Its operating margin of around 22% and free cash flow margin of roughly 21% remain below Fortinet’s levels. The company also continues to spend aggressively on innovation and customer acquisition, which could pressure margins if macroeconomic conditions weaken. Zscaler’s growth increasingly depends on large enterprise spending and successful adoption of newer AI-security offerings, which are still in the early stages.
The Case for Fortinet Stock
Fortinet remains one of the most diversified cybersecurity companies in the market. The company started on a strong note by reporting outstanding first-quarter results, wherein revenues soared 20% to $1.85 billion, while non-GAAP EPS jumped 41% to 82 cents. Billings rose 31% year over year to $2.09 billion. Large enterprise demand remained particularly strong, with the value of deals above $1 million rising more than 60%.
Fortinet, Inc. Price, Consensus and EPS Surprise
Fortinet, Inc. price-consensus-eps-surprise-chart | Fortinet, Inc. Quote
A major strength for Fortinet is its integrated platform strategy. The company combines networking and security products through its FortiOS operating system, enabling customers to deploy firewall, SD-WAN, SASE and AI-driven security operations on a single platform. This simplifies operations and lowers total ownership costs for enterprises. Fortinet’s proprietary ASIC chips also provide better performance and energy efficiency compared with many competitors.
Fortinet is benefiting from rising AI infrastructure spending as enterprises deploy AI-ready data centers and secure operational technology environments. The company’s OT security billings grew more than 70% in the first quarter of 2026, while Unified SASE billings rose 31%. The company is also expanding rapidly in AI-driven security operations and sovereign SASE solutions.
Fortinet’s profitability is better than Zscaler’s. In the first quarter of 2026, the company generated a non-GAAP operating margin of nearly 36% and an adjusted free cash flow margin of 58%, among the best in the cybersecurity industry.
ZS vs. FTNT: What Does the Estimate Revision Trend Suggest?
The earnings estimate revision trend for the two companies indicates that analysts are becoming more bullish toward FTNT stock. Analysts have raised their estimates for Fortinet’s 2026 earnings by 4.7% over the last 60 days, while by 3.05% for 2027 over the same time frame.
Fortinet Earnings Estimate Revision Trend
Image Source: Zacks Investment Research
In contrast, estimates for Zscaler’s fiscal 2026 and 2027 earnings have remained unchanged over the past 60 days.
Zscaler Earnings Estimate Revision Trend
Image Source: Zacks Investment Research
Zscaler vs. Fortinet: Price Performance and Valuation
Over the past year, shares of Zscaler have plunged 30.6%, while Fortinet soared 20.9%.
Image Source: Zacks Investment Research
On the valuation front, Fortinet trades at 11.52 times forward sales compared to 7.33 times for Zscaler. While Fortinet looks more expensive, its positive earnings estimate revisions justify the premium. Zscaler’s lower valuation reflects its risks, including aggressive spending on innovation and customer acquisition, as well as a lower margin profile than Fortinet.
Image Source: Zacks Investment Research
Final Take: Fortinet Is a Smarter Buy Right Now
Both Zscaler and Fortinet are well-positioned to benefit from rising cybersecurity spending, AI adoption and the growing shift toward zero-trust architectures. Zscaler offers stronger growth and an innovative cloud-native platform that could deliver significant upside over the long term.
However, Fortinet appears to be the better investment option right now. Its diversified platform, strong enterprise momentum, expanding AI and SASE opportunities, industry-leading margins and massive free cash flow generation provide a more balanced risk-reward profile. Despite trading at a richer valuation multiple, Fortinet’s consistent execution and upward earnings estimate revisions make it a more attractive cybersecurity stock for investors seeking stability and long-term growth.
Fortinet sports a Zacks Rank #1 (Strong Buy), making it a clear winner over Zscaler, which has a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.