When you buy a stock there is always a possibility that it could drop 100%. But on the bright side, you can make far more than 100% on a really good stock. Long term Zscaler, Inc. (NASDAQ:ZS) shareholders would be well aware of this, since the stock is up 211% in five years. It's also good to see the share price up 14% over the last quarter.

Since the stock has added US$2.3b to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

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Given that Zscaler didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. When a company doesn't make profits, we'd generally hope to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.

For the last half decade, Zscaler can boast revenue growth at a rate of 36% per year. Even measured against other revenue-focussed companies, that's a good result. So it's not entirely surprising that the share price reflected this performance by increasing at a rate of 26% per year, in that time. So it seems likely that buyers have paid attention to the strong revenue growth. To our minds that makes Zscaler worth investigating - it may have its best days ahead.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. So it makes a lot of sense to check out what analysts think Zscaler will earn in the future (free profit forecasts).

A Different Perspective

It's nice to see that Zscaler shareholders have received a total shareholder return of 30% over the last year. That gain is better than the annual TSR over five years, which is 26%. Therefore it seems like sentiment around the company has been positive lately. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand Zscaler better, we need to consider many other factors. Even so, be aware that Zscaler is showing 1 warning sign in our investment analysis , you should know about...

We will like Zscaler better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) with considerable, recent, insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.