ZS - Zscaler: A Potential $100B Company By 2030

2024-05-14 03:17:15 ET

Summary

• Zscaler is a leader in the SASE market, delivering strong revenue growth and surpassing $2 billion in annual recurring revenue.
• The SASE market is expected to grow at a CAGR of 29%, with the Company as a market leader.
• Our growth model projects ZS stock to become a $100 billion company by 2030 and our five-year price target for the company is $620.

Cybersecurity Sector Sentiment Shift

The cybersecurity sector, has been facing a sentiment shift following the Palo Alto's Q2 earnings report. The company lowered revenue guidance and mentioned a spending fatigue among its clients. This mentioning of spending fatigue together with Palo Alto's decision to follow a promotional pricing strategy initiated a broad sell-off in cybersecurity stocks. Investors got concerned about future growth rates of cybersecurity stocks and their high valuation multiples. Companies like Zscaler which have been trading at high valuations saw significant declines in their stock prices. The key question here is if this is a sector-wide slowdown or rather a company-specific issue....

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