Zscaler Earnings Preview: Revenue Growth of 25.9%
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 5 days ago
0mins
Source: Yahoo Finance
- Revenue Beat: Zscaler reported revenues of $815.8 million last quarter, reflecting a year-on-year growth of 25.9%, which not only surpassed analyst expectations but also indicates strong market performance, likely driving further stock price appreciation.
- Optimistic Outlook: The company’s EPS guidance for the next quarter exceeds analyst expectations, and the full-year EPS guidance is also positive, demonstrating management's confidence in future growth, which may attract more investor interest.
- Stable Market Expectations: This quarter, the market anticipates Zscaler's revenue to grow by 23.2% year-on-year, aligning with last year's 22.6% increase, and analysts' sustained optimism is reflected in the reaffirmation of estimates over the past 30 days.
- Strong Stock Performance: Zscaler's stock has surged 35.6% over the past month, outperforming the cybersecurity sector's average increase of 10%, with the current share price at $181.92 and an analyst price target of $223.39, indicating a strong buy signal.
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Analyst Views on ZS
Wall Street analysts forecast ZS stock price to rise
30 Analyst Rating
24 Buy
6 Hold
0 Sell
Strong Buy
Current: 130.040
Low
260.00
Averages
325.62
High
390.00
Current: 130.040
Low
260.00
Averages
325.62
High
390.00
About ZS
Zscaler, Inc. is a cloud security company. The Company has developed a platform incorporating core security functionalities needed to enable fast and secure access to cloud resources based on identity, context and an organization's policies. Its Zscaler Zero Trust Exchange is a cloud-native platform that securely connects users, devices, applications and workloads, including artificial intelligence (AI) agents, without relying on hub-and-spoke network architecture and firewall-centric security. It delivers its solutions using a software-as-a-service (SaaS) business model and sells subscriptions to customers to access its cloud platform, together with related support services. Its services include Zscaler Internet Access (ZIA), Zscaler Private Access (ZPA), and Zscaler Digital Experience (ZDX). ZIA provides secure access to externally managed applications, including SaaS applications and internet destinations, regardless of device, location or network.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Investor Reaction: The disappointment among investors regarding the company's future outlook may lead to increased selling pressure, further depressing stock prices and affecting the company's market capitalization.
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- Positive Economic Indicators: The May MNI Chicago PMI jumped 13.5 to 62.7, well above the expected 50.3, marking the strongest expansion pace in 4.25 years, which supports the bullish sentiment in the stock market.
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- Crude Oil Price Decline: Crude oil prices fell more than 1% to a five-week low due to a preliminary agreement between the U.S. and Iran, easing inflation concerns and fostering optimism about a potential recovery in oil supply, which could benefit related industries.
- Strong Corporate Earnings: As of now, 84% of S&P 500 companies have beaten Q1 earnings estimates, with overall earnings projected to rise 12% year-over-year, although excluding the tech sector, growth is only expected at 3%, indicating market reliance on tech for future growth amidst uncertainty.
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