Zscaler vs. Check Point: Which Cybersecurity Stock Has an Edge Now?

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%.

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.

CHKP is experiencing a growth in its revenues from the steady adoption of its cloud solutions and a robust demand for Quantum Force, Harmony Email and Infinity platforms. Rising demand for network security gateways to ensure greater capacities is aiding in the adoption of Check Point’s remote access VPN solutions.

Check Point is also increasing its revenues by implementing subscription-based solutions and services. The subscription-based model ensures stable recurring revenues with a high gross margin. In the fourth quarter of 2024, Check Point’s security subscription revenues were $292.2 million, which increased 9.9% year over year.

CHKP’s 2025 earnings have been pegged at $9.95, indicating year-over-year growth of 8.6%.

Stock Price Performance and Valuation of ZS and CHKP

Due to broader market correction, both stocks have been extremely volatile recently. However, over the past year, Check Point has gained 28.9%, while Zscaler shares have returned 9.5%.

Check Point is trading at a forward sales multiple of 8.28X, way below the Zacks Security industry’s 12.53X. Zscaler is also trading below the Security industry at a forward sales multiple of 9.91X. Although both stocks look cheaper than the industry’s forward sales multiple, CHKP’s lower valuation than ZS and strong fundamentals make it more attractive.

Conclusion: Check Point vs Zscaler Stock

While Zscaler is still navigating the headwinds emerging from rising operational costs and declining profit margin, Check Point is gaining strong traction in its Quantum Force, Harmony Email and Infinity platforms.

Currently, Check Point carries a Zacks Rank #2 (Buy), making the stock a stronger pick compared with Zscaler, which has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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