Zscaler Forecasts Q4 Revenue Below Estimates Amidst Rising Competition
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3 days ago
0mins
Source: Newsfilter
- Revenue Forecast Downgrade: Zscaler's Tuesday earnings report indicates that fourth-quarter revenue is expected to fall below market estimates, signaling intensified competition in the cybersecurity market as enterprises scrutinize spending on cloud security products, leading to a 15% drop in shares during after-hours trading.
- Increased Market Competition: As demand for cybersecurity rises, Zscaler faces pressure from competitors, with enterprise clients becoming more cautious about investing in cloud security products, which could impact the company's market share and future growth potential.
- Significant Stock Reaction: The downgrade in revenue expectations resulted in a 15% plunge in Zscaler's stock price during after-hours trading, reflecting investor concerns about the company's future performance and potentially affecting its financing capabilities and market confidence.
- Need for Strategic Adjustment: In an increasingly competitive environment, Zscaler may need to reassess its market strategy and product pricing to maintain its competitiveness in the cloud security sector and attract more enterprise clients.
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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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- 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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