KeyBanc analyst Eric Heath raised the price target on Zscaler (NASDAQ: ZS) to $310.00 (from $290.00) while maintaining an Overweight rating.

The analyst commented: "Strong F3Q Beat; Reiterate Overweight following a strong F3Q beat, consistent with our checks, and better than the sluggish April quarter security prints thus far. F3Q billings beat by $24M, consistent with the TTM average. Mgmt. noted it saw no changes in the macro environment, which differs from peers. F4Q guided relatively in line on revenue, billings, and margins. Mgmt. articulated the Red Canary acquisition builds upon its Avalor acquisition for a data fabric that doesn't require customers to send all logs to a data lake and can instead augment or replace a SIEM. Further, mgmt. notes its network logs are the highest fidelity and the most voluminous. (We anticipate the debate on endpoint vs. network log strategic relevance to pick up again.) Mgmt. expects Red Canary to contribute about half of the reported $140M ARR primarily as it de-emphasizes the portions that don't overlap with ZS's enterprise customer base, Zscaler introduced Z-Flex for a more flexible credit model to enable broader platform adoption, similar to what other peers have done recently, and, lastly, Kevin Rubin was named CFO. We see strong momentum in the SASE market, a strengthening portfolio of emerging products to cross-sell, and an experienced GTM leadership team selling to the C-suite. Following F3Q results, we modestly raise our revenue, billings, FCF, and EPS estimates for FY25-FY27 and, as a result, raise PT to $310."