Core Insights - Zscaler has announced a definitive agreement to acquire Red Canary, enhancing its capabilities in Managed Detection and Response (MDR) and threat intelligence [1][2] - The acquisition aims to integrate Zscaler's AI-driven workflows with Red Canary's expertise, creating a unified Security Operations Center (SOC) [1][3] - Zscaler protects nearly 45% of Fortune 500 organizations and processes over 500 billion daily transactions, establishing itself as a leader in cloud security [2][4] Company Overview - Zscaler operates the world's largest cloud security platform, leveraging a massive data lake to develop advanced AI-driven solutions [2][4] - Red Canary has over 10 years of experience in security operations, recognized as a leader in the Forrester Wave™ for MDR for three consecutive years [2][4] - The integration of both companies is expected to enhance threat detection and response capabilities, addressing common operator pain points [3][4] Strategic Goals - The acquisition is seen as a natural expansion of Zscaler's capabilities, aiming to accelerate the vision of an AI-powered SOC of the future [2][3] - By combining resources, the companies aim to improve the speed and efficiency of threat detection and response, helping organizations tackle modern security challenges [3][4] - The transaction is subject to customary closing conditions and is expected to close in August 2025 [4]

Core Viewpoint - Zscaler is expected to report third-quarter fiscal 2025 results with anticipated revenues of $665 million to $667 million, reflecting a year-over-year growth of 20.4% [1]. Revenue and Earnings Estimates - The Zacks Consensus Estimate for Zscaler's fiscal third-quarter revenues is $666.1 million [1]. - Non-GAAP earnings per share are expected to be between 75-76 cents, with the Zacks Consensus Estimate at 75 cents, indicating a year-over-year decline of 14.8% [2]. - Revenue estimates from Channel Partners and Direct Customers are projected at $588 million and $77.4 million, respectively, with a remaining performance obligation of approximately $4.65 billion [10]. Market and Product Insights - Sustained demand for Zscaler's security and networking solutions is anticipated, driven by the expansion of the global security space and the adoption of its Zero Trust Exchange [7]. - The growing adoption of Software-Defined Wide Area Network (SD-WAN) solutions is expected to be a primary driver, with the market projected to reach $80.91 billion by 2034, growing at a CAGR of 31.6% [8]. - Zscaler's existing core products, including Zscaler Internet Access and Zscaler Private Access, are contributing to customer retention, while new features in its Zero Trust Exchange are aiding product portfolio expansion [9]. Competitive Position and Financial Performance - Zscaler's shares have increased by 40.9% year-to-date, outperforming the Zacks Security industry's growth of 16.9% [12]. - The stock is trading at a forward 12-month P/S of 12.79X, which is lower than the industry's 14.21X, indicating potential undervaluation [13]. Strategic Initiatives and Challenges - The company is investing in sales and marketing capabilities and increasing research and development costs to address longer deal cycles due to tighter IT budgets [11]. - Zscaler faces intense competition from established players like Palo Alto Networks and CrowdStrike, necessitating continuous investment in broadening its capabilities [18][19]. Long-term Outlook - The demand for cybersecurity solutions is rising due to increasing data breaches, and Zscaler's strong presence across various verticals provides stability against macroeconomic headwinds [16][17]. - Despite the long-term growth prospects, near-term challenges related to profit growth suggest a cautious approach for new investments [20].

Core Viewpoint - Zscaler, Inc. will host an innovations briefing for investors on June 3, 2025, during its Zenith Live 2025 event in Las Vegas, Nevada [1][2]. Group 1: Event Details - The innovations briefing is scheduled to start at 11:30 a.m. PT and conclude before 2:00 p.m. PT [2]. - A live webcast and replay of the briefing will be available on the Investor Relations section of the Zscaler website [2]. Group 2: Company Overview - Zscaler is a leader in cloud security, focusing on accelerating 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 (ZS) is expected to report quarterly earnings of $0.75 per share, reflecting a decline of 14.8% year-over-year, while revenues are forecasted to be $666.11 million, indicating a 20.4% increase compared to the previous year [1] - There have been no revisions in the consensus EPS estimate over the last 30 days, suggesting stability in analysts' forecasts [1][2] - The average estimates for Zscaler's key metrics show significant growth, particularly in revenues from direct customers and channel partners [4] Revenue Estimates - Analysts predict 'Revenues- Direct Customers' to be $76.85 million, representing a 51.2% increase from the year-ago quarter [4] - The consensus estimate for 'Revenues- Channel Partners' is $589.01 million, indicating a 17.3% increase from the prior-year quarter [4] Other Key Metrics - 'Billings' are expected to reach $792.21 million, up from $628.04 million in the previous year [4] - 'Remaining Performance Obligations' are estimated at $4.73 billion, compared to $3.82 billion a year ago [5] - The 'Dollar-Based Net Retention Rate' is projected to be 115.0%, slightly down from 116% in the previous year [5] Stock Performance - Zscaler shares have returned +17.9% over the past month, outperforming the Zacks S&P 500 composite, which saw an +8.2% change [5]

Core Insights - Zscaler has been recognized as a leader in the "2025 Security Service Edge Magic Quadrant" by Gartner, achieving the highest position on the 'Ability to Execute' axis for the fourth consecutive year [1][3] Company Overview - Zscaler, Inc. (NASDAQ: ZS) specializes in cloud security and aims to enhance digital transformation for its customers by providing a secure connection for users, devices, and applications globally [6] - The company operates the world's largest in-line cloud security platform, the Zscaler Zero Trust Exchange™, distributed across more than 150 data centers [6] Industry Trends - The Security Service Edge (SSE) market is driven by factors such as VPN replacement, Zero Trust networking, SaaS adoption, and GenAI security [2] - Gartner estimates that SaaS will be the largest cloud revenue generator, with a compound annual growth rate of over 15% through 2028 [2]

Core Viewpoint - Wall Street anticipates a year-over-year decline in Zscaler's earnings despite higher revenues, with a focus on how actual results will compare to estimates [1][2]. Earnings Expectations - Zscaler is expected to report earnings of $0.75 per share, reflecting a year-over-year decrease of 14.8%, while revenues are projected to be $666.11 million, an increase of 20.4% from the previous year [3]. - The earnings report is scheduled for May 29, 2025, and could influence stock movement based on whether results exceed or fall short of expectations [2]. Estimate Revisions - The consensus EPS estimate has been revised down by 53.85% over the last 30 days, indicating a bearish sentiment among analysts regarding Zscaler's earnings prospects [4][10]. - Zscaler's Earnings ESP stands at -15.68%, suggesting that the Most Accurate Estimate is lower than the consensus estimate, complicating predictions of an earnings beat [11]. Historical Performance - Zscaler has consistently beaten consensus EPS estimates in the past four quarters, with a notable surprise of +13.04% in the last reported quarter [12][13]. Industry Comparison - Okta, another player in the security industry, is expected to report earnings of $0.77 per share, indicating a year-over-year increase of 18.5%, with revenues projected at $679.73 million, up 10.2% from the previous year [17]. - Okta's consensus EPS estimate has been revised down by 0.3% recently, resulting in an Earnings ESP of -0.93%, combined with a Zacks Rank of 4 (Sell), making predictions of an earnings beat challenging [18].

Core Insights - Zscaler, Inc. has appointed Raj Judge as Executive Vice President of Corporate Strategy and Ventures, aiming to drive the company's growth strategy towards achieving $5 billion in Annual Recurring Revenue (ARR) and beyond [1][3] Company Overview - Zscaler is a leader in cloud security, providing a Zero Trust Exchange that protects thousands of customers from cyberattacks and data loss by securely connecting users, devices, and applications globally [5] Leadership Appointment - Raj Judge brings over 25 years of experience in the tech legal and venture capital sectors, having previously served as Senior Partner and Co-Chair at Wilson Sonsini [2] - Judge's expertise in corporate strategy and investment is expected to significantly impact Zscaler's growth and innovation agenda [3] - The appointment reflects Zscaler's commitment to advancing its corporate strategy and long-term vision [3] Strategic Goals - Judge will focus on key growth and investment opportunities, working closely with stakeholders to accelerate innovation and broaden Zscaler's platform for its customers [3][4]

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].