Head to Head Analysis: Zscaler (NASDAQ:ZS) vs. Okta (NASDAQ:OKTA)

Zscaler (NASDAQ:ZS) and Okta (NASDAQ:OKTA) are both large-cap computer and technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, risk, dividends, valuation and analyst recommendations.

Institutional & Insider Ownership

46.5% of Zscaler shares are held by institutional investors. Comparatively, 86.6% of Okta shares are held by institutional investors. 18.1% of Zscaler shares are held by insiders. Comparatively, 5.7% of Okta shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Zscaler and Okta”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Zscaler	$2.17 billion	20.81	-$57.71 million	($0.26)	-1,114.38
Okta	$2.61 billion	6.14	$28.00 million	$0.63	145.33

Okta has higher revenue and earnings than Zscaler. Zscaler is trading at a lower price-to-earnings ratio than Okta, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Zscaler and Okta’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Zscaler	-1.52%	-0.59%	-0.18%
Okta	4.85%	2.79%	1.92%

Analyst Recommendations

This is a summary of recent recommendations for Zscaler and Okta, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Zscaler	0	8	28	1	2.81
Okta	3	14	20	0	2.46

Zscaler currently has a consensus price target of $296.82, indicating a potential upside of 2.44%. Okta has a consensus price target of $119.44, indicating a potential upside of 30.45%. Given Okta’s higher probable upside, analysts plainly believe Okta is more favorable than Zscaler.

Volatility and Risk

Zscaler has a beta of 1.11, indicating that its share price is 11% more volatile than the S&P 500. Comparatively, Okta has a beta of 0.82, indicating that its share price is 18% less volatile than the S&P 500.

Summary

Okta beats Zscaler on 9 of the 15 factors compared between the two stocks.

About Zscaler

Zscaler, Inc. operates as a cloud security company worldwide. The company offers Zscaler Internet Access solution that provides users, workloads, IoT, and OT devices secure access to externally managed applications, including software-as-a-service (SaaS) applications and internet destinations; and Zscaler Private Access solution, which is designed to provide access to managed applications hosted internally in data centers, and private or public clouds. It also provides Zscaler Digital Experience that measures end-to-end user experience across business applications, as well as provides an easy-to-understand digital experience score for each user, application, and location within an enterprise. In addition, the company offers Posture Control solutions comprising Cloud Security Posture Management that identifies and remediates application misconfigurations in SaaS, infrastructure as a service, and PaaS to reduce risk and ensure compliance with industry and organizational benchmarks; Cloud Infrastructure Entitlement Management that detects and remediates excessive or unused cloud permissions and enforces least privileged access without disrupting productivity; Infrastructure as Code (IaC), which analyzes IaC templates to identify misconfigurations and other security issues prior to deployment to cloud infrastructure; and Vulnerability Scanning and Data Loss Prevention solutions. Its platform modules include Zscaler Central Authority, Zscaler Enforcement Node, and Zscaler Log Servers. The company serves customers in airlines and transportation, conglomerates, consumer goods and retail, financial services, healthcare, manufacturing, media and communications, public sector and education, technology, and telecommunications services industries. 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.

About Okta

Okta, Inc. operates as an identity partner in the United States and internationally. The company offers Okta's suite of products and services used to manage and secure identities, such as Single Sign-On that enables users to access applications in the cloud or on-premises from various devices; Adaptive Multi-Factor Authentication provides a layer of security for cloud, mobile, web applications, and data; API Access Management enables organizations to secure APIs; Access Gateway enables organizations to extend Workforce Identity Cloud; and Okta Device Access enables end users to securely log in to devices with Okta credentials. It also provides Universal Directory, a cloud-based system of record to store and secure user, application, and device profiles for an organization; Lifecycle Management enables IT organizations or developers to manage a user's identity throughout its lifecycle; Okta Identity Governance provides identity access management and identity governance solutions; Advanced Server Access offers access management to secure cloud infrastructure; Okta Privileged Access enables organizations to reduce risk with unified access and governance management for on-premises and cloud resources; and Okta Workforce Identity Workflows. In addition, the company offers Universal Login, which allows customers to provide login experience across different applications and devices; and Attack Protection, a suite of security capabilities that protects customers from different types of malicious traffic. Further, it provides Adaptive Multi-Factor Authentication, Passwordless, Machine to Machine, Private Cloud, Organizations, Actions and Extensibility, and Enterprise Connections. The company sells its products directly to customers through sales force and channel partners. The company was formerly known as Saasure, Inc. Okta, Inc. was incorporated in 2009 and is headquartered in San Francisco, California.