Palo Alto Networks (PANW) and Zscaler (ZS) are major players in the cybersecurity sector, tackling challenges such as credential theft and social engineering attacks. In the third quarter of fiscal 2026, PANW reported a 40% year-over-year increase in Secure Access Service Edge (SASE) annual recurring revenues, while also facing substantial integration costs of $113 million, up from $5 million in the previous quarter, affecting profitability.
Zscaler’s Zero Trust Everywhere strategy has led to strong adoption, with over 700 enterprises using this platform by the end of Q3 2026, increasing from over 550 in the prior quarter. Zscaler secured a record branch deal involving 2,000 sites with a healthcare system and is set to outperform in terms of earnings outlook, with EPS estimates of $4.14 and $4.57 for fiscal 2026 and 2027, respectively, compared to PANW’s $3.77 and $4.08.
Year-to-date, PANW shares have increased by 79.2%, while ZS shares have decreased by 36.9%. Currently, ZS is trading at a forward sales multiple of 5.92X, in contrast to PANW’s 19.79X, making ZS a more attractive option for investors seeking value and stability.
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