Zscaler (NASDAQ: ZS ) continues to gain momentum as one of the leading cloud native cybersecurity providers in the world. They currently leverage a Zero Trust architecture that helps enterprises secure users, apps, and systems across increasingly complex IT environments. The company'sHello and welcome to my Seeking Alpha page. My name is Jack Elias, and I am a dedicated business student with a fervent passion for the world of investing. With a solid foundation in both theoretical knowledge and practical exp ...

Company Performance - Zscaler's stock closed at $252.57, reflecting a +0.43% change from the previous session, outperforming the S&P 500's daily gain of 0.09% [1] - Over the past month, Zscaler shares have increased by 25.07%, surpassing the Computer and Technology sector's gain of 18.89% and the S&P 500's gain of 13.05% [2] Upcoming Financial Results - Zscaler is set to announce its earnings on May 29, 2025, with analysts expecting earnings of $0.75 per share, indicating a year-over-year decline of 14.77% [3] - The consensus estimate for revenue is $666.11 million, representing a 20.41% increase compared to the same quarter of the previous year [3] Full-Year Estimates - The full-year Zacks Consensus Estimates predict earnings of $3.06 per share and revenue of $2.65 billion, reflecting year-over-year changes of -4.08% and +22.18%, respectively [4] Analyst Projections - Recent shifts in analyst projections for Zscaler should be monitored, as positive estimate revisions are seen as a good sign for the company's business outlook [5] - Estimate alterations are linked to stock price performance, and the Zacks Rank model incorporates these changes for actionable insights [6] Zacks Rank and Valuation - Zscaler currently holds a Zacks Rank of 3 (Hold), with the Zacks Consensus EPS estimate having decreased by 18.31% in the past month [7] - The company is trading with a Forward P/E ratio of 82.26, which is a premium compared to the industry's average Forward P/E of 71.1, and has a PEG ratio of 5.96, higher than the security industry's average PEG ratio of 3.15 [8] Industry Context - The Security industry, part of the Computer and Technology sector, has a Zacks Industry Rank of 51, placing it in the top 21% of over 250 industries [9]

Core Viewpoint - Cybersecurity providers are expected to remain resilient amid market volatility caused by tariffs, as cybercriminal activities continue unabated. Investors are encouraged to consider four leading cybersecurity stocks this month [1]. Group 1: Palo Alto Networks - Palo Alto Networks is transitioning from a next-generation firewall provider to a comprehensive cybersecurity platform, implementing a "platformization" strategy to consolidate customers onto three main platforms [3]. - The strategy has resulted in 1,150 of its top 5,000 customers adopting one of its platforms, with a target of 2,500 to 3,500 by fiscal year 2030. Growth is also seen in its Cortex threat detection and response solution and Prisma Cloud [4]. - Although the platformization strategy temporarily slowed growth, it is expected to yield long-term benefits for investors [5]. Group 2: CrowdStrike - CrowdStrike is positioned to benefit from companies consolidating their cybersecurity needs onto a single platform, being a leader in endpoint security [6]. - The company offers a comprehensive suite of cybersecurity solutions, with 67% of customers deploying five or more modules and 21% using eight or more [8]. - With the impact of a previous IT outage behind it, CrowdStrike is expected to see growth accelerate, making it an attractive investment opportunity [9]. Group 3: Zscaler - Zscaler is a leader in zero-trust security, emphasizing continuous verification of users and devices for secure access [10]. - The company has successfully upsold its zero-trust systems and reported a 40% increase in annual contract value for its data security products, with overall revenue growing 23% year over year [12]. - Zscaler's strong net dollar retention rate of 115% indicates robust growth within its existing customer base, positioning it well for future success [12]. Group 4: SentinelOne - SentinelOne is a rapidly growing endpoint cybersecurity company with a low forward price-to-sales multiple of 6.6, despite achieving 29% revenue growth last quarter [13]. - The partnership with Lenovo, the world's largest enterprise PC vendor, to ship computers with SentinelOne's Singularity Platform is a significant opportunity [14]. - The company is also successfully upselling its Purple AI, which enhances security operations through hyper-automation, indicating a promising future [15][16].

Core Insights - Newmark facilitated the largest new office lease in Silicon Valley since 2023, representing Zscaler in a 301,163-square-foot sublease for its new global headquarters [1][2][3] - The new headquarters, located at 4301 and 4401 Great America Parkway in Santa Clara, California, is set to open in summer 2026 and aims to support Zscaler's rapid growth in the zero trust cybersecurity sector [1][2][3] Company Overview - Zscaler is a leader in zero trust cybersecurity, providing AI-powered solutions to protect enterprises [1] - The new facility will enhance Zscaler's innovative environment and accommodate its expanding workforce, reflecting the company's commitment to collaboration and community impact [2][3] Newmark's Role - Newmark's Vice Chairman Mike Saign and Senior Managing Director Rich Hoyt led the team that advised Zscaler on this significant transaction [2] - Newmark Group, Inc. reported revenues exceeding $2.8 billion for the twelve months ending March 31, 2025, and operates approximately 165 offices globally with around 8,100 professionals [4]

Core Viewpoint - Zscaler, Inc. is set to release its third quarter fiscal year 2025 earnings on May 29, 2025, after market close, followed by an investor conference call to discuss the results [1]. Group 1: Earnings Release Details - The earnings report will be released after the market closes on Thursday, May 29, 2025 [1]. - An investor conference call is scheduled for 1:30 p.m. Pacific time (4:30 p.m. Eastern time) on the same day [1][2]. - A live webcast of the conference call will be available on the Zscaler website [2]. Group 2: Company Overview - Zscaler is a leader in cloud security, facilitating digital transformation for customers to enhance agility, efficiency, resilience, and security [3]. - The Zscaler Zero Trust Exchange™ platform protects thousands of customers from cyberattacks and data loss by securely connecting users, devices, and applications globally [3]. - The platform is distributed across more than 150 data centers worldwide, making it the largest in-line cloud security platform based on SASE [3].

Core Insights - Zscaler's stock has increased by 18.2% in the past month, outperforming the Zacks Security industry's return of 14.8%, leading investors to consider whether to hold or take profits [1] Group 1: Performance and Demand - The demand for Zscaler's cybersecurity solutions is strong, driven by increasing threats such as nation-state cyber warfare and ransomware attacks [1] - Zscaler achieved a 12-month trailing dollar-based retention rate of 115% in Q2 fiscal 2025, supported by larger bundle sales and robust upsells [2] - Remaining Performance Obligations increased by 28% year over year, indicating strong future revenue commitments [2] Group 2: Government Sector Expansion - Zscaler is enhancing its GovCloud solutions to comply with government security standards, expanding its presence among government agencies [3] - The company added one cabinet-level agency client in Q4, bringing its total to 13 out of 15 U.S. cabinet-level agencies, indicating growth potential in the public sector [4] Group 3: AI Integration and Partnerships - Zscaler is implementing generative AI in its offerings, collaborating with NVIDIA and CrowdStrike to enhance its cybersecurity solutions [5][6] - The integration of NVIDIA's AI technologies strengthens Zscaler's Zero Trust Security model, improving its capabilities in threat intelligence and real-time insights [6] Group 4: Financials and Investments - Zscaler's revenue for fiscal 2025 is projected to increase by 22.2% year over year, reflecting strong demand for its products [8] - Non-GAAP sales and marketing expenses rose by 12.9% year over year to $237.5 million, accounting for 36.7% of Q2 fiscal 2025 revenues, indicating aggressive market strategies [10] - R&D expenses surged by 34.7% year over year to $105 million, representing 16.2% of total revenues, highlighting the company's commitment to innovation [11] Group 5: Valuation Concerns - Zscaler's premium valuation is evident with a Forward 12-month P/S ratio of 11.56X, significantly higher than the sector average of 5.71X, raising concerns about overvaluation [12] Group 6: Investment Recommendation - Despite the premium valuation, Zscaler's AI innovations and strong position in the Zero Trust security space suggest it is a stock worth retaining, currently holding a Zacks Rank 3 (Hold) [15]

Group 1 - Zscaler Inc. (ZS) is currently at a breakout point, testing resistance levels after a year of trading within a consolidation channel [1] - The company's performance and potential for growth are under scrutiny as it approaches these critical resistance levels [1] Group 2 - The article does not provide any specific financial data or performance metrics related to Zscaler Inc. [1]

Group 1 - Zscaler, Inc. is positioned for strong growth as enterprises increasingly adopt GenAI in production applications, which enhances the demand for data protection and zero trust security [1] - The adoption of GenAI is expected to drive significant opportunities for Zscaler in the coming years [1] Group 2 - The article emphasizes the importance of considering the entire investment ecosystem rather than evaluating a company in isolation [1]

Company Overview - Zscaler (ZS) closed at $219.86, with a +1.99% change from the previous day, outperforming the S&P 500's daily gain of 0.06% [1] - Over the past month, Zscaler shares gained 4.07%, contrasting with the Computer and Technology sector's loss of 5.52% and the S&P 500's loss of 4.29% [1] Earnings Expectations - The upcoming earnings release is expected to show an EPS of $0.75, a 14.77% decrease compared to the same quarter last year [2] - Revenue is forecasted to be $666.11 million, indicating a 20.41% growth year-over-year [2] Full-Year Estimates - Full-year Zacks Consensus Estimates predict earnings of $3.06 per share and revenue of $2.65 billion, reflecting year-over-year changes of -4.08% and +22.18%, respectively [3] - Recent revisions to analyst forecasts are crucial as they reflect near-term business trends, with positive changes indicating analyst optimism [3] Valuation Metrics - Zscaler's Forward P/E ratio is 70.56, which is higher than the industry average of 63.04, indicating a premium valuation [6] - The current PEG ratio stands at 5.11, compared to the Security industry's average PEG ratio of 3.2 [6] Industry Context - The Security industry is part of the Computer and Technology sector and holds a Zacks Industry Rank of 160, placing it in the bottom 36% of over 250 industries [7] - The Zacks Industry Rank assesses the performance of industry groups based on the average Zacks Rank of individual stocks, with the top 50% rated industries outperforming the bottom half by a factor of 2 to 1 [7]

Industry Overview - Cybersecurity has transitioned from a back-office concern to a boardroom priority due to the increasing frequency and sophistication of cyberattacks, with global cybercrime costs projected to rise from $9.22 trillion in 2024 to $15.63 trillion by 2029 [1] - The global cybersecurity market is expected to grow from $193.73 billion in 2024 to $562.72 billion by 2032, reflecting a compound annual growth rate (CAGR) of 14.3% [2] - The growth in the cybersecurity market is driven by increasing enterprise IT complexity, rising regulatory scrutiny, and the need for real-time protection of data, identities, and infrastructure [2] Technological Advancements - Artificial intelligence (AI) is revolutionizing the cybersecurity landscape, enabling more efficient detection, prevention, and response to cyber threats [3] - AI can analyze large volumes of data, detect anomalies, and identify potential breaches in real time, providing a proactive approach to security [3] Company Highlights - Companies like Fortinet, Zscaler, Okta, and Qualys are heavily investing in AI-driven security solutions to enhance their capabilities and position themselves for long-term growth in the expanding cybersecurity market [4] - Okta specializes in identity and access management (IAM) and is ramping up its AI capabilities to address the complexities of digital identities [6] - Qualys focuses on vulnerability management and cloud security, integrating advanced AI models into its platforms for faster detection and remediation of security threats [10][11] - Fortinet offers a comprehensive suite of cybersecurity solutions, differentiating itself with high-performance security at lower costs, and has integrated AI-driven analytics into its services [13][14][15] - Zscaler is a pioneer in zero-trust security, enhancing its platform with AI-powered security analytics to improve threat detection and response [16][17][18] Financial Performance - Okta reported 19,650 customers at the end of fiscal Q4 2025, with a 7% year-over-year increase in customers with over $100,000 in Annual Contract Value (ACV) [8] - Qualys' AI-powered platform is expected to drive customer adoption and revenue growth, positioning it well in the market [12] - Fortinet has consistently delivered profitability and strong free cash flow, reflecting its growing market share and demand for AI-enhanced security solutions [15] - Zscaler has maintained robust financial performance with expanding revenues driven by demand for its AI-enhanced offerings [18]