Zscaler (ZS) vs. Sogou (SOGO) Financial Survey

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

Insider & Institutional Ownership

23.0% of Zscaler shares are held by institutional investors. Comparatively, 5.6% of Sogou shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Zscaler and Sogou’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Zscaler $190.17 million 23.33 -$33.64 million ($0.31) -119.48
Sogou $908.36 million 2.94 $82.20 million $0.29 23.17

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

Profitability

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

Net Margins Return on Equity Return on Assets
Zscaler N/A N/A N/A
Sogou N/A N/A N/A

Analyst Recommendations

This is a summary of current ratings and recommmendations for Zscaler and Sogou, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Zscaler 0 8 2 1 2.36
Sogou 1 1 1 0 2.00

Zscaler presently has a consensus target price of $35.86, suggesting a potential downside of 3.18%. Sogou has a consensus target price of $12.83, suggesting a potential upside of 90.97%. Given Sogou’s higher possible upside, analysts clearly believe Sogou is more favorable than Zscaler.

Zscaler Company Profile

Zscaler, Inc. operates as a cloud security company worldwide. The company develops a software-as-a-service based security platform that secures access for users and devices to applications and services. It serves airline and transportation, conglomerate, consumer good and retail, financial service, healthcare, manufacturing, media and communication, public sector and education, technology, and telecommunications service 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.

Sogou Company Profile

Sogou Inc. provides search and search-related services in the People's Republic of China. The company provides Sogou Search, a search engine; and Sogou Input Method, a Chinese language input software for mobile and PC MAUs. It also offers search and search-related advertising services; Internet value-added services related to the operation of Web games and mobile games developed by third parties; and online reading services, as well as other products and services, including smart hardware products. The company was incorporated in 2005 and is based in Beijing, the People's Republic of China. Sogou Inc. is a subsidiary of Sohu.com Inc.

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