ZS - Zscaler: Navigating The Intersection Of Cybersecurity And AI For Investors
2024-05-17 13:11:33 ET
Summary
- Zscaler is a cloud-based cybersecurity company that offers a Zero Trust Exchange platform to solve cybersecurity issues in the cloud.
- Lately, investors have been unimpressed with declining revenue and its GAAP unprofitability.
- The company is a beneficiary of the proliferation of AI.
Cybersecurity company Zscaler, Inc. ( ZS ) was doing well up until it reported its second quarter fiscal year ("FY") 2024 earnings on February 29, 2024. Although the company exceeded analysts' revenue and earnings estimates for the quarter, forward guidance unimpressed the market, and the stock dropped 20.6% in March in reaction to the results. Zscaler has underperformed the S&P 500 Index ( SPX ) and First Trust NASDAQ Cybersecurity ETF ( CIBR ) from the start of 2024 to the May 14 market close.
Despite the recent decline in stock price, the long-term prospects for the company remain as bright as ever. The company is one of the leaders of a secular trend in the cybersecurity industry towards merging networking and security functionality -- a trend still in its early stages. Additionally, the company should benefit from the cybersecurity industry moving toward consolidation and incorporating artificial intelligence ("AI") into security solutions. Zscaler has only penetrated 2.6% of its opportunity, estimated at $72 billion....
Zscaler: Navigating The Intersection Of Cybersecurity And AI For Investors