Zscaler Outpaces Okta with 26% Revenue Growth as Cybersecurity Paths Diverge

Okta's stock performance has been underwhelming, with a 30% drop in the past 12 months. In contrast, Zscaler has demonstrated stronger fundamentals with 26% revenue growth and 25% ARR growth. Zscaler's position in the market with a strong AI-driven security strategy also bodes well for its future growth.

Okta and Zscaler are two cybersecurity leaders navigating a fast-changing landscape disrupted by AI. While Okta has seen decelerating growth with revenue increasing 12% and guidance suggesting just 9% growth ahead , ZS has outperformed with 26% revenue growth and 25% annual recurring revenue (ARR) growth to $3.3 billion in Q2 fiscal 2026. Zscaler has also achieved the Rule of 40 metric, demonstrating strong financial health.

The divergence is particularly notable in how each company is positioning around AI. Zscaler is expanding its AI-driven zero-trust security platform, integrating machine learning across threat detection and data protection. OKTA faces a more challenging environment, with its stock down 30% over the past 12 months as investors question whether its identity-centric model can keep pace with evolving threats. Zscaler's stock has also declined over 20% in the same period, but its superior growth trajectory has attracted more institutional interest.

For investors weighing these two cybersecurity plays, the fundamental question is whether Okta's lower valuation represents a value opportunity or a value trap. Zscaler's momentum in AI-driven security and its stronger growth metrics position it as the more compelling long-term candidate, though both stocks face headwinds from a broader tech sector rotation away from high-multiple names.