Zscaler, Inc. (NASDAQ:ZS) shareholders might be concerned after seeing the share price drop 20% in the last quarter. But in three years the returns have been great. The share price marched upwards over that time, and is now 106% higher than it was. So the recent fall in the share price should be viewed in that context. If the business can perform well for years to come, then the recent drop could be an opportunity.

Now it's worth having a look at the company's fundamentals too, because that will help us determine if the long term shareholder return has matched the performance of the underlying business.

See our latest analysis for Zscaler

Because Zscaler made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last 3 years Zscaler saw its revenue grow at 42% per year. That's well above most pre-profit companies. Meanwhile, the share price performance has been pretty solid at 27% compound over three years. But it does seem like the market is paying attention to strong revenue growth. Nonetheless, we'd say Zscaler is still worth investigating - successful businesses can often keep growing for long periods.

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

Zscaler is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. You can see what analysts are predicting for Zscaler in this interactive graph of future profit estimates.

A Different Perspective

Zscaler shareholders are down 18% for the year, falling short of the market return. The market shed around 11%, no doubt weighing on the stock price. Investors are up over three years, booking 27% per year, much better than the more recent returns. Sometimes when a good quality long term winner has a weak period, it's turns out to be an opportunity, but you really need to be sure that the quality is there. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 4 warning signs with Zscaler , and understanding them should be part of your investment process.

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

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