In This Article:
Zscaler ZS and Check Point Software CHKP are two cybersecurity giants playing critical roles in securing enterprise environments, but in very different ways. While Zscaler was built from scratch as a cloud platform, Check Point started as an on-prem security provider and is now adding cloud options.
Both Zscaler and Check Point are capitalizing on the rapid expansion of the cybersecurity space, driven by the increasing frequency of attacks, such as credential theft and abuse, remote desktop protocol attacks and social engineering-based initial access. Per a Mordor Intelligence report, the cybersecurity market is projected to witness a CAGR of 12.63% from projecting a robust CAGR of 9.4% from 2025 to 2030.
With this robust industry growth forecast, the question remains: Which stock has more upside potential? Let’s break down their fundamentals, growth prospects, market challenges and valuation to determine which offers a more compelling investment case.
The Case for Zscaler
Zscaler is one of the leading cloud-based security companies offering a full range of enterprise network security solutions, such as web security, Internet security, antivirus, vulnerability management, firewalls, and control over user activity in mobile, cloud computing, and Internet of things environments.
Zscaler is capitalizing on the increasing demand for privileged access security in digital transformation and cloud-migration strategies is a key growth driver. Furthermore, Zscaler’s presence across several industry verticals has helped it stay protected from the negative impacts of macroeconomic and geopolitical headwinds.
Nevertheless, since ZS operates in a highly competitive cybersecurity space, the company has to invest heavily in sales and marketing (S&M) and research and development (R&D), squeezing near-term profitability. Over the past few years, Zscaler’s S&M and R&D expenses both have been in double digits.
While S&M expenses were mainly driven by increasing the sales force, investment in R&D remained a top priority for Zscaler. Over the past couple of years, it has almost doubled its R&D expenses to improve the design, architecture, operation and quality of its cloud platform.
Zscaler’s fiscal 2026 earnings have been pegged at $3.08, indicating a year-over-year decline of 3.5%.
Image Source: Zacks Investment Research
The Case of Check Point
Check Point offers a range of software and combined hardware solutions aimed at securing information technology infrastructure. Check Point’s solutions can either be attached to the operating system, a computer device, a server or a virtual desktop to cover network and gateway security and comprehensive data security.