Why Zscaler Shares Are Trading Higher Today

Zscaler Inc ZS is trading higher Wednesday after the company announced better-than-expected first-quarter fiscal 2022 financial results and issued guidance above estimates.

Zscaler reported quarterly earnings of 14 cents per share, which beat the estimate of 12 cents per share. The company reported quarterly revenue of $230.5 million, which beat the estimate of $208.32 million, representing an increase of 62% year-over-year.

Zscaler expects second-quarter fiscal 2022 revenue to be in a range of $240 million to $242 million versus the estimate of $221.15 million.

"CISOs and CIOs are looking to phase out legacy network security in favor of zero trust architecture, due to increasing cyber and ransomware risks and accelerating digital transformation. This architecture shift continues to drive strong demand for our Zero Trust Exchange platform," said Jay Chaudhry, chairman and CEO of Zscaler.

Related Link: Recap: Zscaler Q1 Earnings

Analyst Assessment: Multiple analyst firms raised price targets on the stock following Zscaler's financial results:

• Needham analyst Alex Henderson maintained Zscaler with a Strong Buy rating and raised the price target from $390 to $418.
• Wedbush analyst Daniel Ives maintained Zscaler with an Outperform rating and raised the price target from $320 to $400.
• Goldman Sachs analyst Brian Essex maintained Zscaler with a Neutral rating and raised the price target from $295 to $386.
• Morgan Stanley analyst Keith Weiss maintained Zscaler with an Equal-Weight rating and raised the price target from $275 to $330.
• UBS analyst Fatima Boolani maintained Zscaler with a Neutral rating and raised the price target from $295 to $380.
• Mizuho analyst Gregg Moskowitz maintained Zscaler with a Buy rating and raised the price target from $385 to $400.
• Canaccord Genuity analyst Michael Walkley maintained Zscaler with a Buy rating and raised the price target from $340 to $400.

Zscaler is a security-as-a-service firm that offers its customers cloud-delivered solutions for protecting user devices and data.

ZS Price Action: Zscaler has traded as high as $376.11 and as low as $143.40 over a 52-week period.

The stock was up 6.64% at $370 at time of publication.