Core Insights - Zscaler and Check Point Software are both significant players in the cybersecurity industry, with Zscaler focusing on cloud-based solutions and Check Point transitioning from on-premises to cloud options [1][9] Industry Overview - The cybersecurity market is expected to grow at a CAGR of 12.63%, with a robust CAGR of 9.4% projected from 2025 to 2030, driven by increasing cyberattacks [2] Zscaler Analysis - Zscaler offers a comprehensive range of enterprise network security solutions, including web security, antivirus, and firewalls, and is well-positioned to benefit from the demand for privileged access security [4][5] - The company has seen a significant increase in sales and marketing (S&M) and research and development (R&D) expenses, which have both been in double digits, impacting near-term profitability [6][7] - Zscaler's fiscal 2026 earnings are estimated at $3.08, reflecting a year-over-year decline of 3.5% [7][8] Check Point Analysis - Check Point provides a variety of software and hardware solutions for IT infrastructure security, with a focus on cloud solutions and subscription-based models that ensure stable recurring revenues [9][10][11] - The company reported security subscription revenues of $292.2 million in Q4 2024, marking a 9.9% year-over-year increase, with 2025 earnings projected at $9.95, indicating an 8.6% growth [11][12] Stock Performance and Valuation - Over the past year, Check Point's stock has increased by 28.9%, while Zscaler's shares have returned 9.5% [13] - Check Point trades at a forward sales multiple of 8.28X, significantly lower than the Zacks Security industry's average of 12.53X, while Zscaler trades at 9.91X, making Check Point's valuation more attractive [14] Conclusion - Check Point is gaining traction with its Quantum Force, Harmony Email, and Infinity platforms, while Zscaler faces challenges from rising operational costs and declining profit margins. Check Point holds a Zacks Rank 2 (Buy), making it a stronger investment option compared to Zscaler, which has a Zacks Rank 3 (Hold) [16]

Datadog and Zscaler could eclipse the fintech company's market cap by 2027.Block (XYZ -2.56%), the fintech company formerly known as Square, was once a hot growth stock. It went public in 2015, and its revenue grew at a compound annual growth rate (CAGR) of 55% from 2015 to 2021. That growth was fueled by the expansion of Square's digital payment platform and the popularity of its Cash app for peer-to-peer payments, Bitcoin transactions, and commission-free stock trades.But from 2021 to 2024, Block's revenu ...

Core Insights - The Zscaler ThreatLabz 2025 VPN Risk Report highlights the urgent need for organizations to transition from traditional VPNs to a Zero Trust security model due to the increasing vulnerabilities and risks associated with VPN usage [1][4][5] VPN Security Challenges - 56% of enterprises using VPNs cite maintaining security and compliance as their largest challenge [1] - 92% of IT professionals are concerned that unpatched VPN vulnerabilities will lead to ransomware attacks [1][4] - 54% of respondents identify security and compliance risks as the top challenges associated with VPNs [3] Shift to Zero Trust - 81% of organizations plan to implement a Zero Trust strategy within the next year, indicating a significant shift in security architecture [1][5][13] - The report emphasizes that traditional VPNs are inadequate for modern cyber threats, as they expose networks to potential attacks [2][12] Vulnerability Trends - VPN Common Vulnerabilities and Exposures (CVEs) increased by 82.5% from 2020 to 2024, with 60% of these vulnerabilities rated as high or critical [10] - Remote code execution (RCE) vulnerabilities are the most prevalent, posing serious risks to organizations [10] Concerns Over Third-Party Access - 93% of organizations express concerns about backdoor vulnerabilities from third-party VPN connections [7][11] - A notable incident involved a financial services company suffering a data breach due to VPN vulnerabilities, affecting nearly 20,000 clients [11] Recommendations for Organizations - Organizations are encouraged to adopt a Zero Trust framework to minimize attack surfaces, block threats, and enhance data security [13][14] - The report provides best practices for replacing VPN security risks with a robust Zero Trust architecture [14]

Zscaler (ZS) shares soared 3.1% in the last trading session to close at $180.06. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 16.3% loss over the past four weeks.The upswing was likely due to a recovery in the broader stock market after a massive sell-off last week following the announcement of a “reciprocal tariff” by President Donald Trump.This cloud-based information security provider is expected to post quarterly earnings ...

Core Insights - Zscaler, Inc. (ZS) stock has shown significant volatility over the past three months but delivered a 9.2% return, outperforming the broader technology sector and the S&P 500, which declined by 11.9% and 5.4%, respectively [1][4] - The company is experiencing strong demand for its cybersecurity solutions, driven by increasing threats and a shift from legacy network security to cloud-based solutions [5][6] Financial Performance - In Q2 of fiscal 2025, Zscaler achieved a 12-month trailing dollar-based retention rate of 115%, with Remaining Performance Obligations growing 28% year over year [6] - Zscaler had 620 customers with annualized recurring revenues (ARR) exceeding $1 million and 3,291 customers with ARR above $100,000 [6][8] - The Zacks Consensus Estimate for fiscal 2025 revenues suggests a 22.2% year-over-year increase, with EPS revised upward to $3.07 [9][10] Government Sector Expansion - Zscaler is enhancing its GovCloud offerings to comply with government security standards, which will help expand its presence among government agencies [7][8] - The company added one cabinet-level agency client in Q4, bringing its total to 13 out of 15 U.S. cabinet-level agencies [8] AI and Cybersecurity Innovations - Zscaler is leveraging generative AI to enhance its security solutions, partnering with NVIDIA and CrowdStrike to integrate AI technologies [13][14] - The company has deepened its AI capabilities through acquisitions and collaborations, which have driven financial performance in its AI-driven analytics products [15] Valuation Concerns - Zscaler holds a premium valuation, indicated by a Zacks Value Score of F and a Forward 12-month P/S ratio of 10.25X, significantly higher than the sector average of 5.49X [16][19] Investment Recommendation - Despite the premium valuation, Zscaler's strong position in Zero Trust security and AI innovations suggest that holding the stock remains a viable strategy [4][19]

Core Viewpoint - Zscaler's stock price has been on an upward trend over the past six months, driven by market sentiment and other factors, despite a deteriorating short-term outlook and weak leading indicators [1][2][16] Financial Performance - In Q2, Zscaler generated $648 million in revenue, a 23% year-over-year increase, although below the expected 25% growth [12] - The annual recurring revenue (ARR) at the end of the quarter was $2.7 billion, also reflecting a 23% year-over-year growth [12] - The remaining performance obligation (RPO) grew 28% year-over-year to $4.615 billion, while total calculated billings increased 18% to $743 million [12] - The company expects Q3 revenue to be between $665 million and $667 million, representing a year-over-year growth of 20-21% [12] Customer Growth and Retention - Zscaler saw a strong net customer increase in Q2, with the number of customers generating $100,000 in annual revenue growing by 19% and those generating $1 million growing by 28% [14] - The net retention rate improved to 115% in Q2, indicating a recovery in customer retention [14] Market Position and Strategy - Zscaler continues to promote its zero-trust model, questioning the advantages of SD-WAN and most SASE architectures, focusing on reducing attack surfaces and eliminating lateral threat propagation [4] - The upcoming device refresh cycle presents an opportunity for Zscaler to convert customers from traditional architectures [4] - The company is expanding its offerings from user protection to workloads, OT devices, and B2B users [6] Product Development and AI Integration - Zscaler views artificial intelligence as a tailwind for demand and product development, particularly in data security [10] - The company has launched AI analytics solutions, with the ACV of its AI analytics product line nearly doubling year-over-year in Q2 [10] Sales and Operational Efficiency - Zscaler has shifted to a customer-centric sales model, which initially led to sales personnel turnover but is now stabilizing with improved productivity [11] - The company is expected to continue increasing the number of sales representatives, which should support growth in the near term [11] Competitive Landscape - Zscaler faces significant competition in the SASE market, and its ability to leverage the device refresh cycle will be crucial for its architecture and customer perception [1][4] - The company is actively promoting the benefits of its zero-trust approach to attract new customers [4] Challenges and Outlook - Despite the overall improvement in investor confidence towards SaaS companies, Zscaler acknowledges that the environment remains challenging [1] - The demand environment for 2025 appears to be deteriorating, contrasting with expectations for stability or improvement in 2024 [2] - Zscaler's growth rate is slowing, but the company still has substantial long-term growth opportunities [6][19]

Core Insights - Zscaler collaborated with T-Mobile to implement the Zscaler Zero Trust Exchange™ AI-powered cloud security platform, enhancing T-Mobile's cybersecurity infrastructure and reducing reliance on traditional VPNs [1][2][3] Company Overview - Zscaler is a leader in cloud security, providing a platform that protects thousands of customers from cyberattacks and data loss by securely connecting users, devices, and applications globally [4] Deployment Details - T-Mobile's deployment of the Zscaler Zero Trust Exchange took three months and has since improved secure access to applications and the internet, regardless of user location or device [1][3] - The platform operates on the principle of least-privileged access, establishing trust based on user identity and context, which includes location, device, application, and content [3] Security Enhancements - The collaboration aims to enhance T-Mobile's cybersecurity approach, ensuring that only verified and authorized users can access necessary systems, thereby significantly reducing cyber threat risks [2][3] - Zscaler's tools have allowed T-Mobile to retire legacy firewalls and VPNs, promoting more efficient access to applications and information [3] Additional Features - Zscaler offers various services, including Zscaler Internet Access™ (ZIA™) for secure internet access, Zscaler Private Access™ (ZPA™) to replace traditional VPNs, and advanced threat detection technologies [5]

Core Viewpoint - The article discusses the author's previous bullish stance on Zscaler (NASDAQ: ZS) due to its growth potential driven by factors such as Federal spending and a shift in the go-to-market model [1] Group 1: Company Analysis - Zscaler was previously rated as a buy, indicating strong confidence in its growth trajectory [1] - The growth strength of Zscaler is supported by external factors like government spending and changes in its market approach [1] Group 2: Investment Approach - The author emphasizes a diverse investment strategy that includes fundamental, technical, and momentum investing, suggesting a holistic approach to capital management [1] - The intention behind writing on Seeking Alpha is to track investment ideas and connect with other investors sharing similar interests [1]

Group 1 - The article discusses the investment strategy of Zscaler, Inc. (NASDAQ: ZS), with a reiterated "buy" rating and a price target of $221, indicating a bullish outlook on the company's growth potential [1] - The investment strategy focuses on sustainable, growth-driven companies that aim to maximize shareholder equity, reflecting a broader trend in the investment community towards responsible investing [1] - The author highlights the importance of financial literacy and aims to make complex macroeconomic concepts more accessible to a wider audience, which aligns with current trends in democratizing investment knowledge [1]

Group 1 - The article highlights that tariffs and recession fears have negatively impacted most growth stocks this year, with Zscaler being a notable exception in the cybersecurity sector [1] - Zscaler focuses on protecting customer data, positioning itself as a resilient player amidst challenging market conditions [1] Group 2 - The author, Gary Alexander, has extensive experience in technology companies and has been a contributor to Seeking Alpha since 2017, indicating a strong background in industry analysis [1] - Alexander's insights are informed by his experience in both Wall Street and Silicon Valley, as well as his advisory role to seed-round startups [1]