Better Cybersecurity Stock: Okta vs. Zscaler

If you spend your workdays in front of a computer, there’s a solid chance you’re required to keep your company safe from bad actors through either Okta (OKTA 2.91%) or **Zscaler **(ZS 2.48%). Both cybersecurity businesses are pure-play leaders in a growing market. They technically serve different niches, but which one is the stronger long-term investment?

Is Okta undervalued?

At the beginning of March, Okta released its full results for the 2026 fiscal year. The cybersecurity company saw a 12% year-over-year increase in revenue. Subscriptions reached nearly $3 billion. Okta also turned operating income from a net loss to a net gain in its latest fiscal year.

Okta’s guidance for 2027 is solid, but it shows a declining growth rate, with only 9% revenue growth expected in the coming year. Where remaining performance obligations (RPOs) grew 15% in fiscal 2026, Okta expects that growth to slow to 10% in fiscal 2027.

Image source: Getty Images.

The numbers are positive, but there’s a real slowdown happening with Okta’s revenue. The stock has dropped 30% in the past 12 months. This drawdown potentially makes Okta undervalued right now. The company is facing headwinds as artificial intelligence (AI) poses a significant threat, yet it continues to grow and maintains a strong industry position.

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NASDAQ: OKTA

Okta

Today’s Change

(-2.91%) $-2.35

Current Price

$78.41

Key Data Points

Market Cap

$14B

Day’s Range

$78.21 - $80.33

52wk Range

$68.77 - $127.57

Volume

63K

Avg Vol

3M

Gross Margin

77.36%

Zscaler’s impressive growth

Zscaler’s stock is also down over 20% in the past year, but the company’s financials are quite promising. In the second quarter of fiscal 2026, Zscaler reported revenue of $815.8 million, an impressive 26% year-over-year increase. Annual recurring revenue also grew 25% to $3.3 billion.

Zscaler revised its full-year 2026 guidance upward and now expects 24% revenue growth. The company’s stock is still trading at a premium, as its forward P/E ratio sits above 40. Yet, the decline in the stock price is making the valuation metrics more appealing. Combine that with the expectations of revenue growth, and Zscaler stock is a compelling buy.

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NASDAQ: ZS

Zscaler

Today’s Change

(-2.48%) $-3.86

Current Price

$151.54

Key Data Points

Market Cap

$24B

Day’s Range

$148.34 - $153.48

52wk Range

$140.56 - $336.99

Volume

103K

Avg Vol

2.5M

Gross Margin

76.28%

Zscaler also hits the “Rule of 40” metric for growing software-as-a-service (SaaS) companies. This rule states that a healthy SaaS business has a combined growth rate and profit margin exceeding 40%. Zscaler is growing efficiently in this regard.

Regarding AI, Zscaler is focused on AI-driven security products. The company isn’t working against AI; it’s collaborating with it to ensure customer safety.

Which stock wins?

Both stocks are volatile but remain industry leaders. Okta’s stock is priced better, but Zscaler’s financials demonstrate a superior growth trajectory.

In the long term, Zscaler is the better investment, in my opinion. Okta’s decelerating growth is a real concern. As AI disrupts many cybersecurity companies, Zscaler is well-positioned to withstand competition and expand its platform.