Core Insights - Zscaler (ZS) and Qualys (QLYS) are significant players in the cybersecurity sector, both competing in the vulnerability management space [1][2] - The cybersecurity market is expected to grow at a CAGR of 12.63% from 2025 to 2030, driven by increasing cyberattacks [2] Zscaler Overview - Zscaler provides a wide range of enterprise network security solutions, including web security, antivirus, and vulnerability management [4] - The company integrates over 150 data sources for unified vulnerability management, enhancing automation in risk mitigation [5] - Zscaler is focusing on privileged access security due to digital transformation trends and has a diverse industry presence, which helps mitigate macroeconomic risks [6] - The integration of AI in Zscaler's offerings enhances its capabilities in threat detection and mitigation [7] - However, rising sales and marketing expenses, along with increased R&D investment, are leading to margin compression, with fiscal 2025 earnings projected at $3.18 per share, a decline of 0.31% year-over-year [8][10] Qualys Overview - Qualys is a leader in Vulnerability Management, Detection and Response (VMDR) solutions, with a growing customer base and product enhancements [11] - The company has a strong channel partner program that accelerates revenue growth, particularly through cloud-based security solutions [12] - Qualys reported a 16% year-over-year growth in international revenue, indicating successful organic expansion [13] - The total addressable market for Qualys is projected to reach $72 billion by 2027, growing at approximately 13% annually [14] - Fiscal 2025 revenues for Qualys are estimated at $652.2 million, reflecting a year-over-year increase of 7.34%, with earnings projected at $6.17 per share, a growth of 0.65% [15] Stock Performance and Valuation - Year-to-date, Zscaler shares have returned 68%, while Qualys shares have returned 1.2% [17] - Zscaler trades at a forward sales multiple of 15.21X, above the industry average of 14.77X, while Qualys trades at a lower multiple of 7.69X [19] - Qualys is currently rated as a Zacks Rank 1 (Strong Buy), making it a more attractive investment compared to Zscaler, which holds a Zacks Rank 3 (Hold) [20]