ZS - Cybersecurity Stock Zscaler's Impressive Q3 Print And Federal Expansion Boost Analyst Confidence | Benzinga
Zscaler Inc (NASDAQ:ZS) shares are trading higher after the company reported better-than-expected third-quarter earnings Thursday.
Oppenheimer analyst Ittai Kidron reiterated Zscaler as an Outperform and lowered the price target on software industry multiple compression from $290 to $260.
Zscaler reported solid fiscal third-quarter 2024 results, beating estimates behind broad-based demand, solid execution, and operating leverage, Kidron noted. The company saw strong adoption of its user bundle, substantial expansion of >$100K/>$1M ARR customers, no change to competition, and strength in the Federal vertical.
While macro remains challenging, and there was higher sales attrition during the quarter, Kidron noted guidance for the fourth quarter and expectations into fiscal 2025 are conservative, creating a positive setup for the upside. Additionally, given its technological leadership as a zero trust platform, Kidron noted Zscaler is well positioned to address a significant market opportunity and increase penetration for its emerging products.
Cantor Fitzgerald analyst Yi Fu Lee maintained a Neutral and lowered the price target from $230 to $200, which was in line with the peer-group average trading multiple, following a robust set of third-quarter results.
Mizuho analyst Gregg Moskowitz maintained a Buy and lowered the price target from $240 to $220 on lower comp multiples.
Moskowitz said that amid a great deal of malaise in the software sector, Zscaler reported a stunningly good quarter that far exceeded investor expectations. Management also cited a much better-than-expected contribution from its emerging products and raised its full-year outlook.
More broadly, the analyst noted that Zscaler remains very well positioned for growth and that its unique cloud proxy security architecture should enable it to thrive in an increasingly digital-enabled world. He also continues to expect significant improvements in monetization going forward.
BMO Capital analyst Keith Bachman maintained an Outperform and raised the price target from $192 to $208, given higher confidence in reaching the July ...