Was the tech stock's sell-off an overreaction? Shares of Zscaler (ZS -3.37%) sank after the cybersecurity company issued disappointing guidance in conjunction with its fiscal 2024 fourth-quarter results this week. The stock now trades down nearly 27% so far this year. Disappointing guidance often triggers the market to sell a stock, but was this selloff an overreaction? If it was, is now a good opportunity to buy the stock on the dip? Disappointing guidance In its fiscal fourth quarter (ended July 31), Zsca ...

E n - l Michael Vi 60,0% 54.2% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% 1Q23 What Happened in 4Q FY2024 Earnings Zscaler (NASDAQ:ZS) experienced an 18% selloff after issuing weaker-than-expected earnings guidance, which implies an 11% YoY decline in non-GAAP EPS for FY 2025. The company is currently facing growth headwinds amid increased competition in the cybersecurity industry. While 2.5's revenue forecast for FY2025 beat market consensus, the revenue growth outlook signals a significant slowdown in billings an ...

There's a stark difference between the company's recent performance and its anticipated future. Investors in cybersecurity company Zscaler (ZS 3.26%) probably weren't feeling too secure over the past few days. According to data compiled by S&P Global Market Intelligence, Zscaler's stock was down by almost 19% week to date as of late Thursday evening. An uninspiring quarterly earnings report, accompanied by analyst price target cuts and even a downgrade, was largely to blame. Trailing success, looming disapp ...

Zscaler's NASDAQ: ZS 2025 guidance disappointed the market and sparked a heavy round of analyst revisions. The bulk of revisions are negative and put the stock on MarketBeat's list of Most Downgraded names, not a typical position for stocks that are good buys. However, downgrades are relative to where the sentiment was pegged at the start of the cycle and where it ends at the end, which, in this case, is good on both counts. Zscaler Today | --- | --- | --- | |-----------------------|-------|-------| | | | | ...

Cybersecurity is a critical need for every organization, so the recent stock market weakness might be a great opportunity to buy Zscaler stock. The S&P 500 generated a return of 15% in the first half of this year, but it recently hit a patch of volatility and is trading 3% below its July peak. The next couple of months could be tricky to navigate with the Federal Reserve set to cut interest rates, and the U.S. presidential election in November. But history suggests the S&P 500 always recovers to new highs o ...

Zscaler, Inc. (NASDAQ:ZS) Citi Global TMT Conference September 5, 2024 11:40 AM ET Company Participants Jay Chaudhry – Chief Executive Officer and Founder Remo Canessa – Chief Financial Officer Conference Call Participants Fatima Boolani – Citi Fatima Boolani Everybody, Fatima Boolani here. I jointly run their software research team here at Citi. I have the pleasure of the Zscaler's C-suite on the stage with me. It's my right, Jay Chaudhry, CEO and Founder; and to his right, the inimitable CFO, Remo Canessa ...

Zscaler, Inc. (NASDAQ:ZS) Citi Global TMT Conference September 5, 2024 11:40 AM ET Company Participants Jay Chaudhry – Chief Executive Officer and Founder Remo Canessa – Chief Financial Officer Conference Call Participants Fatima Boolani – Citi Fatima Boolani Everybody, Fatima Boolani here. I jointly run their software research team here at Citi. I have the pleasure of the Zscaler's C-suite on the stage with me. It's my right, Jay Chaudhry, CEO and Founder; and to his right, the inimitable CFO, Remo Canessa ...

Markets are driven by emotions and psychology. They are what makes patterns form on charts. Over the past few days, shares of Zscaler, Inc. ZS have been in meltdown mode. They have dropped by more than 20% in just a few days. This is why it's our Stock of the Day. As you can see on the chart, the sell-off paused or maybe even ended right around $156.50. This is the same level that it found support at in late May and early August. This is not a coincidence. There can be support at price levels that was suppo ...

Core Viewpoint - Zscaler, Inc. experienced an 18.7% stock decline following the release of its fourth-quarter fiscal 2024 results, primarily due to disappointing profit outlook despite strong revenue and earnings growth [1] Group 1: Financial Performance - Zscaler reported a 30% year-over-year revenue growth, reaching $593 million, with a full-year revenue growth of 34% [2] - Billings increased by 27%, indicating strong customer demand for Zscaler's Zero Trust Exchange platform, with quarterly bookings surpassing $1 billion and annual recurring revenues (ARR) reaching $2.5 billion [2] - The operating margin was reported at 22% and free cash flow margin at 23% for the fourth quarter [6] Group 2: Market Position and Competitive Landscape - Zscaler holds a leading position in the zero-trust security market, serving over 8,700 customers and protecting nearly 50 million users globally [3] - The company's cloud-native platform differentiates it from competitors like Palo Alto Networks, Fortinet, and CrowdStrike, especially as zero-trust architectures become a security standard [4] Group 3: Profitability Concerns - The market's negative reaction was largely due to Zscaler's guidance for fiscal 2025, projecting billings growth to decelerate to 19%-20%, down from 27% in fiscal 2024, which is expected to compress profit margins [6] - CEO Jay Chaudhry emphasized that the shift in profitability is linked to aggressive investments in AI and cloud infrastructure rather than a fundamental business weakness [7] Group 4: Growth Opportunities - Zscaler is enhancing its AI-driven analytics, which is expected to drive upselling opportunities and strengthen its market position [8] - The demand for zero-trust security platforms is increasing due to rising cyberattacks, positioning Zscaler to capitalize on this trend with its cloud-native architecture [9] - The company is seeing strong momentum in emerging products like AI analytics, with generative AI solutions gaining traction [10] - Zscaler has expanded its presence in the federal market, securing a new cabinet-level agency as a client, which may enhance its foothold in the public sector [11] Group 5: Valuation and Technical Indicators - Zscaler's current valuation raises concerns, as it trades at a premium to the Zacks Internet – Services industry average based on a one-year forward price-to-sales (P/S) ratio [12] - The stock has dipped below its 50-day and 200-day moving averages, indicating potential downward pressure in the short term [13] Group 6: Conclusion - The recent stock price decline is viewed as an overreaction to short-term profitability concerns, with strong growth prospects due to Zscaler's market position and AI-driven initiatives [14]

A sales slowdown and a weak profit forecast gave cybersecurity investors reason to worry. Zscaler (ZS -17.70%) stock collapsed in morning trading Wednesday, down by 17.8% as of 12:04 p.m. ET, even though the company crushed analysts' forecasts for its fiscal fourth quarter when it reported after the closing bell Tuesday. Analysts had expected the cybersecurity company to report adjusted earnings of $0.69 per share on sales of $567.9 million for the quarter. Instead, its profits were $0.88 per share, and sal ...