Robert W. Baird analyst Shrenik Kothari has maintained their bullish stance on ZS stock, giving a Buy rating on March 1.
Shrenik Kothari has given his Buy rating due to a combination of factors related to Zscaler’s strategic positioning and financial robustness. The acquisition of the Israeli company Avalor notably enhances Zscaler’s Zero Trust Exchange platform, by incorporating Avalor’s Data Fabric for Security, which is expected to significantly amplify the platform’s AI-driven and automated functionalities. This move is seen as an acceleration of Zscaler’s AI Cloud strategy and a direct response to similar acquisitions by competitors, demonstrating Zscaler’s commitment to staying at the forefront of the security sector. Moreover, the company’s ability to maintain its financial guidance post-acquisition speaks to the strength and stability of its operations.
Additionally, this Buy rating takes into account Zscaler’s history and approach to growth through strategic acquisitions, such as the recent purchases of Canonic and Trustdome, which have solidified its position in the market. The management’s utilization of Zscaler’s solid cash position to enable these strategic moves indicates a long-term vision for market expansion, rather than a focus on short-term gains. Kothari’s rating is also underpinned by a rigorous discounted cash flow analysis, suggesting that Zscaler’s valuation is reasonable when compared to its high-growth Software as a Service (SaaS) peers, even with a slight premium attributed to its leadership and growth trajectory within the cybersecurity industry.
In another report released on March 1, JMP Securities also maintained a Buy rating on the stock with a $270.00 price target.
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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:
- The Future of Security Risk Management and Operations is Data and AI
- Zscaler price target raised to $265 from $260 at RBC Capital
- Zscaler price target lowered to $255 from $268 at BMO Capital
- Zscaler price target raised to $225 from $190 at Loop Capital
- Zscaler price target raised to $260 from $250 at Wedbush
