Gray Powell, an analyst from BTIG, maintained the Buy rating on Zscaler (ZS – Research Report). The associated price target is $258.00.
Gray Powell has given his Buy rating due to a combination of factors that suggest Zscaler is positioned for continued growth and profitability. Zscaler’s recent financial results exceeded expectations, with billings growing by 27% year-over-year in FQ2’24, surpassing both Powell’s and the Street’s estimates. Moreover, Zscaler’s operating income overachieved by more than 20% compared to forecasts, and its free cash flow was significantly better than anticipated. Despite only a modest increase in the full-year guidance, the company’s strong performance and track record of surpassing guidance point to a robust financial outlook.
Adding to the optimism, Gray Powell observed that Zscaler has maintained its competitive edge within the large enterprise market, even in the face of heightened focus on new Secure Service Edge (SSE) offerings from competitors. The company’s underlying metrics, such as the growth in Remaining Performance Obligations (RPO) and Current RPO, remained solid, growing by 29% in FQ2. Furthermore, Powell’s analysis suggests that Zscaler is capable of sustaining growth rates above 25% in the second half of FY’24. This potential, coupled with the company’s consistent outperformance and the strength of its sales pipeline, underpins Powell’s decision to maintain a Buy rating and increase the price target to $258 per share.
In another report released today, Bernstein also maintained a Buy rating on the stock with a $280.00 price target.
ZS’s price has also changed dramatically for the past six months – from $144.390 to $241.970, which is a 67.58% increase.
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Zscaler (ZS) Company Description:
Zscaler, Inc., formerly known as SafeChannel Inc., is a cloud-based security solutions provider. The company offers a full range of enterprise network security solutions including internet security, web security, vulnerability management, firewalls, antivirus, and control over user activity in mobile, cloud computing, and Internet of Things environments.
Read More on ZS:
- ZS Earnings: Zscaler Declines Despite Better-than-Expected Fiscal Q2 Results
- Zscaler Reports Second Quarter Fiscal 2024 Financial Results
- Options Volatility and Implied Earnings Moves Today, February 29, 2024
- Zscaler (ZS) Q2 Earnings Cheat Sheet
- Zscaler price target raised to $240 from $212 at JPMorgan
