In the most recent trading session, Zscaler (ZS) closed at $183.93, indicating a +1.61% shift from the previous trading day.
Zscaler (ZS) has received quite a bit of attention from Zacks.com users lately. Therefore, it is wise to be aware of the facts that can impact the stock's prospects.
In the closing of the recent trading day, Zscaler (ZS) stood at $188.76, denoting a -1.46% change from the preceding trading day.
Investors often turn to recommendations made by Wall Street analysts before making a Buy, Sell, or Hold decision about a stock. While media reports about rating changes by these brokerage-firm employed (or sell-side) analysts often affect a stock's price, do they really matter?
Zscaler (ZS) concluded the recent trading session at $198.26, signifying a +1.41% move from its prior day's close.
Zscaler (ZS) has received quite a bit of attention from Zacks.com users lately. Therefore, it is wise to be aware of the facts that can impact the stock's prospects.
Despite ZS' elevated valuation and slowing growth, its long-term prospects in AI-driven cybersecurity justify holding the stock.
Zscaler's operating profit grew 85% CAGR from FY2020 to FY2024, while free cash flow CAGR was at 115% during the same period, achieving strong growth in profitability. FY2025 outlook shows expected revenue growth of 20-21%, with stronger second-half billings driven by improved sales productivity, a robust pipeline, and second half weighted contracted non-cancelable billings. Zscaler's Zero Trust platform and AI analytics solutions are gaining traction, with notable new logo wins and upsell deals, including in the public sector.
Zscaler's share price has declined due to weak FY25 guidance, but current weakness is likely to prove temporary, presenting an attractive entry point. Current weakness is in large part the result of changes to the sales organization and subsequent attrition. Attrition now appears to be normalizing. Revenue growth is expected to stabilize in the second half of FY25, driven by new and upsell business and improved sales productivity.
Zscaler reported its Q4 FY24 earnings, which demonstrated strong enterprise expansion and profitability growth, with revenue up 34% YoY and non-GAAP operating income up 84% YoY. Despite FY25 guidance falling short, Zscaler's long-term growth story remains intact, driven by product innovation and deepening customer adoption. The company's focus on account-centric sales and GSI programs, along with federal market penetration, positions it for significant revenue growth by FY29.
I recommend investors to buy the dip in Zscaler after a ~25% slide in the stock this year. Zscaler slid further when its FY25 outlook slightly missed Street expectations, but its billings results foreshadow stronger growth ahead than its guidance might currently imply. The company has seen stabilization in its sales attrition as well, which may help it deliver a series of beat-and-raise quarters as it begins FY25.
Zscaler reported strong Q4 results with 30% YoY revenue growth and significant margin expansion. The stock has faced pressure from management's conservative billings guidance, but growth is accelerated to pick up in the back half of the year. Zscaler has a net cash balance sheet and is close to sustainable GAAP profitability.