Better Cybersecurity Stock: Okta vs. Zscaler Catie Hogan, The Motley FoolSun, March 22, 2026 at 2:41 AM UTC 0 Key Points Both stocks declined substantially in the past 12 months. Zscaler's revenue grew 26% in its most recent quarterly earnings. Okta's subscription revenue is approaching $3 billion annually. 10 stocks we like better than 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 (NASDAQ: OKTA) or Zscaler (NASDAQ: ZS).
Better Cybersecurity Stock: Okta vs. Zscaler
Catie Hogan, The Motley FoolSun, March 22, 2026 at 2:41 AM UTC
0
Key Points -
Both stocks declined substantially in the past 12 months.
Zscaler's revenue grew 26% in its most recent quarterly earnings.
Okta's subscription revenue is approaching $3 billion annually.
10 stocks we like better than 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 (NASDAQ: OKTA) or Zscaler (NASDAQ: ZS). 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.
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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.
A computer screen shows cybersecurity warning that the system has been hacked.
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.
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.
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.
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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.
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Catie Hogan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Okta and Zscaler. The Motley Fool has a disclosure policy.
Source: "AOL Money"
Source: Money
Published: March 21, 2026 at 11:18PM on Source: PRIME TIME
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