ZS - Zscaler: Growth Slowdown Is Just Beginning

2024-07-05 10:45:54 ET

Summary

• Zscaler is facing a deteriorating demand environment and increased competition.
• Despite macro headwinds, Zscaler is a leader in a large and growing market with expansion opportunities in adjacent markets.
• Zscaler's growth prospects and current valuation mean the company should outperform the market over the long run.
• Volatility is likely to remain elevated in the near term, given the likelihood of growth continuing to fall.

While Zscaler ( ZS ) offers a critical solution and has a reasonably strong competitive position, the company's business continues to decelerate. Much of this is likely a result of the demand environment, but competition in the SASE market is increasing....

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