Zscaler (ZS) Stock Soars on FQ1 Beat and Strong Sales Guidance, Prompts 12 Analysts to Hike PTs

December 1, 2021 7:28 AM EST
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Price: $254.74 --0%

Rating Summary:
    24 Buy, 7 Hold, 3 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 18 | Down: 10 | New: 16
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Shares of Zscaler (NASDAQ: ZS) are trading 6% higher in pre-open Wednesday after the company reported better-than-expected FQ1 results and guided higher.

ZS reported EPS of $0.14 to top the analyst estimate of $0.12. Revenue for the quarter came in at $230.5 million versus the consensus estimate of $208.43 million.

"CISOs and CIOs are looking to phase out legacy network security in favor of zero trust architecture, due to increasing cyber and ransomware risks and accelerating digital transformation. This architecture shift continues to drive strong demand for our Zero Trust Exchange platform,” said Jay Chaudhry, Chairman and CEO of Zscaler.

For this quarter, Zscaler is calling for EPS of $0.11, slightly lower than the consensus of $0.14. Revenues are seen between $240 million and $242 million to crush the average analyst estimate of $221.15 million.

On a full-year basis, EPS is seen between $0.50 and $0.52, lower than the consensus of $0.56. Zscaler sees FY revenue of $1.0 billion to $1.01 billion, versus the consensus of $0.94 billion.

Cowen analyst Shaul Eyal hiked the price target to $405.00 per share from the prior $314.00 on the Outperform-rated ZS shares to reflect strong execution and robust demand.

“ZS remains focused on its $72B TAM opportunity going vertically and horizontally. As the company continues to benefit from a meaningful displacement as well as new greenfield opportunities we view it as further growing its clout within the SASE and zero trust security markets,” Eyal said in a client note.

Mizuho analyst Gregg Moskowitz also hiked the price target to $400.00 per share from the prior $385.00 on the Buy-rated ZS stock as the company continues to “fire on all cylinders.”

“ZS reported a truly impressive F1Q. Revenue and Current RPO growth accelerated, and total billings and RPO managed to avoid any deceleration despite facing meaningfully tougher compares. Large-customer momentum also continues to build, with growth among the $100K+ and $1M+ ARR cohorts having now generally accelerated in each of the last five quarters. We reiterate our view that ZS's unique cloud proxy security architecture will enable it to thrive in an increasingly digital-enabled world. We also expect significant improvements in monetization, particularly as newer offerings (namely, ZDX and ZCP) gain further traction. Despite a premium valuation, we believe ZS is very well positioned.”

Zscaler stock is up nearly 77% YTD.



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