Zscaler Breaks Through Market Challenges With Impressive FQ4, Earns Analyst Applause

Shares of Zscaler Inc ZS got the attention of investors on Wednesday, along with four other stocks.

The results came amid an exciting earnings season. Here are some key analyst takeaways from Zscaler’s earnings release.

Canaccord Genuity On Zscaler

Analyst Michael Walkley maintained a Buy rating, while raising the price target from $172 to $190.

“Zscaler extended its cadence of steady beat-and-raise quarters” by reporting its fiscal fourth-quarter results ahead of expectations across the board, Walkley said in a note. The results were “highlighted by the company surpassing the $2B+ ARR (average recurring revenue) milestone, which doubled in less than two years,” he added.

“We believe Zscaler is increasingly well positioned for sustained strong growth trends given its robust technology moat and strong platform uptake,” the analyst further stated.

Needham On Zscaler

Analyst Alex Henderson reiterated a Strong Buy rating and price target of $210.

Zscaler reported higher-than-expected results “on all metrics even adjusting for a ~1% headwind from ramp deals and a large ~$20 Million upfront Billing from a single multi-year deal in FY4Q,” Henderson said.

The company achieved record operating margins of 18.9%, even as it continues to invest aggressively, the analyst added. "Zscaler also reported record net new ARR customer adds of more than $1 million and has a better enterprise positioning than ever before," he further wrote.

Check out other analyst stock ratings.

Oppenheimer On Zscaler
Analyst Ittai Kidron reaffirmed an Outperform rating and price target of $190.
Zscaler reported “solid” results for the fiscal fourth quarter, driven by “broad-based demand, solid execution, and improvements in operating leverage,” Kidron said.
“The company saw increasing adoption of its emerging products (ZDX, ZPA, Zscaler for Workloads), which accounted for 18% of net new ACV, and exited 4Q with a record pipeline,” he added.

Truist Securities On Zscaler

Analyst Joel Fishbein maintained a Buy rating and price target of $175.

“ZS continued its strong momentum with solid results on both the top and bottom lines in 4FQ23 in a challenging macro environment, affirming its goal of balancing growth and profitability,” Fishbein wrote in a note.

“ZS is benefiting from a favorable demand backdrop and secular tailwinds of digital transformation, cloud security, Zero Trust architecture, and AI,” he added.

JMP Securities On Zscaler

Analyst Trevor Walsh reaffirmed a Market Outperform rating and price target of $225.

“Initial FY2024 guidance was modestly above expectations on the top line, and notably above expectations from a profitability perspective,” Walsh said.

“Zscaler is operating at a high level of growth, profitability, and predictability in a persistently challenging macro environment,” he added.

ZS Price Action: Shares of Zscaler had declined by 0.31% to $162.23 at the time of publication Wednesday.

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