Zscaler (NASDAQ:ZS – Get Free Report) and Dolby Laboratories (NYSE:DLB – Get Free Report) are both technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, earnings, analyst recommendations, institutional ownership, risk, profitability and valuation.
Institutional & Insider Ownership
46.5% of Zscaler shares are owned by institutional investors. Comparatively, 58.6% of Dolby Laboratories shares are owned by institutional investors. 17.2% of Zscaler shares are owned by insiders. Comparatively, 37.9% of Dolby Laboratories shares are owned by insiders. 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.
Profitability
This table compares Zscaler and Dolby Laboratories’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Zscaler | -1.88% | 1.23% | 0.40% |
| Dolby Laboratories | 16.70% | 11.08% | 9.04% |
Earnings and Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Zscaler | $3.35 billion | 9.70 | -$63.18 million | ($0.39) | -511.26 |
| Dolby Laboratories | $1.35 billion | 4.03 | $255.02 million | $2.35 | 24.72 |
Dolby Laboratories has lower revenue, but higher earnings than Zscaler. Zscaler is trading at a lower price-to-earnings ratio than Dolby Laboratories, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of recent ratings and price targets for Zscaler and Dolby Laboratories, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Zscaler | 2 | 6 | 34 | 0 | 2.76 |
| Dolby Laboratories | 0 | 1 | 2 | 0 | 2.67 |
Zscaler presently has a consensus price target of $219.28, indicating a potential upside of 9.97%. Dolby Laboratories has a consensus price target of $87.50, indicating a potential upside of 50.62%. Given Dolby Laboratories’ higher possible upside, analysts plainly believe Dolby Laboratories is more favorable than Zscaler.
Volatility & Risk
Zscaler has a beta of 0.95, meaning that its share price is 5% less volatile than the S&P 500. Comparatively, Dolby Laboratories has a beta of 0.8, meaning that its share price is 20% less volatile than the S&P 500.
Summary
Dolby Laboratories beats Zscaler on 9 of the 14 factors compared between the two stocks.
About Zscaler
Zscaler, Inc. operates as a cloud security company worldwide. The company offers Zscaler Internet Access solution that provides users, workloads, IoT, and OT devices secure access to externally managed applications, including software-as-a-service (SaaS) applications and internet destinations; and Zscaler Private Access solution, which is designed to provide access to managed applications hosted internally in data centers, and private or public clouds. It also provides Zscaler Digital Experience that measures end-to-end user experience across business applications, as well as provides an easy-to-understand digital experience score for each user, application, and location within an enterprise. In addition, the company offers Posture Control solutions comprising Cloud Security Posture Management that identifies and remediates application misconfigurations in SaaS, infrastructure as a service, and PaaS to reduce risk and ensure compliance with industry and organizational benchmarks; Cloud Infrastructure Entitlement Management that detects and remediates excessive or unused cloud permissions and enforces least privileged access without disrupting productivity; Infrastructure as Code (IaC), which analyzes IaC templates to identify misconfigurations and other security issues prior to deployment to cloud infrastructure; and Vulnerability Scanning and Data Loss Prevention solutions. Its platform modules include Zscaler Central Authority, Zscaler Enforcement Node, and Zscaler Log Servers. The company serves customers in airlines and transportation, conglomerates, consumer goods and retail, financial services, healthcare, manufacturing, media and communications, public sector and education, technology, and telecommunications services 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.
About Dolby Laboratories
Dolby Laboratories, Inc. creates audio and imaging technologies that transform entertainment at the cinema, DTV transmissions and devices, mobile devices, OTT video and music services, home entertainment devices, and automobiles. The company develops and licenses its audio technologies, such as AAC & HE-AAC, a digital audio codec solution used for a range of media applications; AVC, a digital video codec with high bandwidth efficiency used in various media devices; Dolby AC-4, a digital audio coding technology that delivers new audio experiences to a range of playback devices; and Dolby Atmos technology for cinema and various media devices. Its audio technologies also include DD, a digital audio coding technology that provides multichannel sound to applications; DD+, a digital audio coding technology that offers audio transmission for a range of media applications and devices; Dolby TrueHD, a digital audio coding technology providing encoding for media application; Dolby Vision, an imaging technology for cinema and media devices; and HEVC, a digital video codec with high bandwidth efficiency for media devices. In addition, the company offers digital cinema servers, cinema processors, amplifiers, loudspeakers, and audio and imaging hardware and software products for the cinema, television, broadcast, communication, and entertainment industries. Further, it provides 3-D glasses and kits; and various services to support theatrical and television production for cinema exhibition, broadcast, and home entertainment. The company serves film studios, content creators, post-production facilities, cinema operators, broadcasters, and video game designers. It sells its products directly to the end users, as well as through dealers and distributors worldwide. Dolby Laboratories, Inc. was founded in 1965 and is headquartered in San Francisco, California.
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