Zscaler, Inc.

“Zscaler trades at ~16.6x EV/TTM FCF on a platform growing 25% YoY with $3.5B in cash, a $96B largely-unpenetrated TAM, and FCF margins compounding toward 40% — a clear mispricing relative to long-term fundamentals. The primary risks are Microsoft's potential to commoditize SSE via E5 bundling and SBC of ~$900M-$1B/year that significantly inflates reported free cash flow relative to true owner earnings. Neither risk is likely to cause permanent capital impairment over a decade, but both widen the outcome distribution enough to warrant a tranche-based entry rather than a full position.”