Despite posting fiscal second-quarter results that topped estimates, Zscaler ( NASDAQ: ZS ) shares sank more than 12% in premarket trading on Friday, prompting investment firm Wedbush Securities to defend the cybersecurity company.
Analyst Dan Ives, who has an outperform rating on Zscaler ( ZS ), noted that the billings figure of $493.8M during the period was "not the typical massive ... beat" investors have come to expect from Zscaler ( ZS ), as there seems to be more scrutiny on budgets and longer sales cycles.
Nonetheless, federal cybersecurity spending looks "robust" and the sharp decline could be a buying opportunity for investors, Ives explained. "In our opinion [Zscaler] remains a gold standard cyber name to own and we would be buyers on weakness for this high quality zero trust growth name going through a near-term uncertain macro."
Looking to the third-quarter, Zscaler ( ZS ) expects revenue to be between $396M and $398M, with adjusted earnings to be around 39 cents per share.
For the full-year, the company expects revenue to be between $1.558B and $1.563B, with calculated billings between $1.935B and $1.945B.
Last month, Zscaler ( ZS ) announced plans to acquire application security platform company Canonic Security .
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Zscaler sinks 12% but Wedbush defends as 'momentum continues'