Company Overview - Zscaler has seen its shares increase nearly 10% year-to-date, driven by strong financial performance in its fiscal 2025 second quarter, which ended January 31 [2] - The company specializes in cybersecurity software and is experiencing robust demand as businesses face increasing digital threats [2] Financial Performance - Zscaler reported revenue of $647.9 million for the fiscal 2025 second quarter, marking a 23% increase year-over-year and exceeding guidance of $634 million [9] - The company has raised its full-year revenue forecast for fiscal 2025 by $14 million to $2.647 billion [9] - Operating expenses grew by only 19% in the first half of fiscal 2025, slower than the nearly 25% revenue growth, indicating improved cost management [10] - Zscaler's net loss for the first half of fiscal 2025 was $19.7 million, a 68% reduction from the previous year's loss of $61.9 million [11] - On a non-GAAP basis, Zscaler achieved profitability of $251.8 million, a 35.1% increase compared to the first half of fiscal 2024 [12] Market Position and Strategy - Zscaler's stock remains 45% below its all-time high from 2021, suggesting potential for investment [3] - The company has shifted from a growth-at-all-costs strategy to a more balanced approach, focusing on sustainable growth and profitability [13] - Zscaler aims to create a "Zero Trust Everywhere" environment, with 130 customers currently adopting this approach and plans to triple that number in 18 months [8] Analyst Sentiment - The majority of analysts covering Zscaler stock have assigned it the highest buy rating, with no recommendations to sell [3][14] - The average price target for Zscaler's stock is $236.50, indicating an 18% potential upside, while the highest target suggests a 35% upside [15] Industry Context - The total addressable market for Zscaler is valued at $96 billion, indicating significant growth potential [16] - Cybercrime is projected to cause $10.5 trillion in damages globally in 2025, suggesting increasing demand for advanced cybersecurity solutions [17] - Zscaler's stock, previously overvalued at around $370, may have the potential to reclaim that level if it continues its current growth trajectory [18]

Core Insights - Zscaler has shown a 20% gain over the past six months, outperforming the S&P 500 index, which remained flat during the same period [1] - The company released its fiscal 2025 second-quarter results, which exceeded expectations and led to a positive outlook for the future [2][3] Financial Performance - Fiscal Q2 revenue increased by 23% year over year to $648 million, while earnings per share grew by 24% to $0.78, surpassing both guidance and consensus expectations [3] - Zscaler raised its fiscal 2025 revenue growth expectation to 22% and increased its operating profit estimate to $567 million from $554 million [4] Market Opportunity - The serviceable addressable market for Zscaler's cloud-based cybersecurity solutions is estimated at $96 billion, indicating significant growth potential [5] - The global data protection market is projected to exceed $500 billion in annual revenue by 2032, suggesting Zscaler can accelerate its growth rate [7] Customer Demand and Growth Metrics - Annual recurring revenue (ARR) from emerging products grew at twice the rate of core products, driven by demand for AI analytics and data protection solutions [6] - Remaining performance obligations (RPO) increased by 28% to $4.6 billion, indicating a higher volume of contracts being secured [8] Profitability and Valuation - Increased spending by existing customers and a larger customer base positively impacted Zscaler's operating profit margin, which rose by 2 percentage points year over year [9] - Zscaler trades at 12 times sales, higher than the U.S. technology sector index's multiple of 7.3, but its growth profile justifies this valuation [10] Future Projections - If Zscaler's revenue reaches $3.84 billion in a couple of fiscal years, its market cap could increase to $46 billion, representing a 43% rise from current levels [11]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended January 31, 2025 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _to_ Commission File Number: 001-38413 ZSCALER, INC. (Exact Name of Registrant as Specified in its Charter) 26-1173892 (I.R.S. Employer Identification Number) ...

Zscaler NASDAQ: ZS can set a fresh multiyear high in 2025, and the move could come before mid-year and happen quickly. It could happen soon because the company’s results and guidance are better than expected, and the analysts are re-engaging with the market. Zscaler Stock Forecast Today12-Month Stock Price Forecast:$232.8415.18% Upside Moderate BuyBased on 33 Analyst RatingsHigh Forecast$270.00Average Forecast$232.84Low Forecast$170.00Zscaler Stock Forecast DetailsAnalysts' sentiment didn’t sour in 2024, bu ...

Now you can get access to the latest and highest-quality analysis of recent Wall Street buying and selling ideas with just one subscription to Beyond the Wall Investing ! There is a free trial and a special discount of 10% for you. Join us today!My first and only article on Zscaler, Inc. (NASDAQ: ZS ) stock came out in July 2023 with a "Hold" rating. At the time I was arguing that ZS investors were overpaying for the stock compared even toDaniel Sereda is chief investment analyst at a family office whose in ...

Company Overview - Zscaler, Inc. is experiencing a strong demand for cybersecurity solutions, with a shift towards software-focused network security [2]. Industry Insights - Cybersecurity is becoming a priority for various executives beyond just the Chief Information Security Officer (CISO), including CIOs, CFOs, CEOs, and Board members, driven by increasing ransomware attacks [2]. - There is a growing recognition that traditional approaches, such as adding more firewalls and VPNs after a breach, are ineffective; instead, a shift towards a more efficient architecture is necessary [2]. - Customers are seeking solutions that provide zero trust architecture while also reducing costs, indicating a dual focus on security and financial efficiency [2][3].

Core Insights - Zscaler's stock experienced a 7% increase following the release of its Q2 fiscal 2025 earnings report, which exceeded market expectations [1] Financial Performance - Zscaler reported adjusted earnings per share (EPS) of $0.78 on sales of $647.9 million for the quarter, surpassing analyst estimates of $0.69 EPS and $635.45 million in sales [2] - Year-over-year sales growth was 23.4%, with deferred revenue reaching approximately $1.88 billion, a 25% increase compared to the same quarter last year [2] - Adjusted EPS increased by 23.8% year over year [2] Future Guidance - For the fiscal third quarter, Zscaler anticipates sales between $665 million and $667 million, slightly below the average analyst estimate of $667.25 million, but adjusted EPS guidance of $0.75 to $0.76 exceeds the forecast of $0.74 [3] - The company's full-year sales guidance is between $2.64 billion and $2.654 billion, which is better than the consensus forecast of $2.64 billion [4] - Zscaler's earnings outlook for the full year is between $3.04 and $3.09 EPS, surpassing Wall Street's expectation of $2.99 [4]

Core Viewpoint - Zscaler (ZS) has received an upgrade to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][2]. Earnings Estimates and Stock Price Movement - Changes in a company's future earnings potential, as indicated by earnings estimate revisions, are strongly correlated with near-term stock price movements [3]. - Institutional investors often rely on earnings estimates to determine the fair value of a company's shares, leading to buying or selling actions that affect stock prices [3]. Zscaler's Earnings Outlook - The recent upgrade for Zscaler reflects an improvement in the company's underlying business, which is expected to positively influence its stock price [4]. - Zscaler is projected to earn $2.99 per share for the fiscal year ending July 2025, representing a year-over-year change of -6.3% [7]. - Over the past three months, the Zacks Consensus Estimate for Zscaler has increased by 56.6%, indicating a positive trend in earnings estimates [7]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have generated an average annual return of +25% since 1988 [6]. - The upgrade of Zscaler to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting a strong potential for market-beating returns in the near term [9].

Core Insights - Zscaler reported strong second-quarter fiscal 2025 results, with non-GAAP earnings of 78 cents per share, exceeding the Zacks Consensus Estimate by 13% and reflecting a year-over-year increase of 23.8% driven by revenue growth and cost management [1][2] - The company’s revenues for the second quarter reached $647.9 million, surpassing the Zacks Consensus Estimate by 2.2% and management's guidance of $633-$635 million, marking a year-over-year growth of 23.4% [2][3] - Following the positive results, Zscaler raised its fiscal 2025 guidance, projecting revenues between $2.64 billion and $2.654 billion, an increase from the previous forecast of $2.623 billion to $2.643 billion [9] Financial Performance - Zscaler's calculated billings increased by 18% year over year to $742.7 million, with the Americas contributing 54% of revenues, EMEA 30%, and Asia Pacific and Japan 16% [4] - The non-GAAP gross profit rose by 22.9% year over year to $520.8 million, while the non-GAAP gross margin contracted by 100 basis points to 80% [7] - Total non-GAAP operating expenses increased by 18.6% year over year to $380.4 million, accounting for 58.7% of revenues, resulting in a non-GAAP operating income of $140.5 million, up from $134.1 million in the prior year [7] Customer Metrics - Zscaler added multiple large customers across its offerings, achieving a net 12-month trailing dollar-based retention rate of 115% due to larger bundle sales and strong upsells [5] - The company had 620 customers with annualized recurring revenues (ARR) of $1 million or more, and 3,291 customers with ARR exceeding $100,000 at the end of the second quarter [6] Cash Flow and Balance Sheet - As of January 31, 2025, Zscaler reported $2.88 billion in cash, cash equivalents, and short-term investments, an increase from $2.71 billion as of October 31, 2024 [8] - The company generated operating cash flow of $179.4 million and free cash flow of $143.4 million during the second quarter, compared to $142 million and $100.8 million, respectively, in the year-ago quarter [8] Future Guidance - For fiscal 2025, Zscaler expects non-GAAP earnings per share in the range of $3.04 to $3.09, up from the previous guidance of $2.94 to $2.99, with the consensus estimate remaining at $2.99 [10] - For the third quarter of fiscal 2025, Zscaler projects revenues between $665 million and $667 million, indicating a year-over-year growth of 20.1% [10][11]

Zscaler Inc ZS stock gained after the company reported better-than-expected second-quarter financial results and issued third-quarter adjusted EPS guidance above estimates.Zscaler reported quarterly earnings of 78 cents per share, which beat the analyst consensus estimate of 69 cents. Quarterly revenue was $647.9 million (up from $525 million a year ago), which beat the analyst consensus estimate of $635.56 million.Also Read: ChatGPT Parent OpenAI’s Specialized AI Agents Could Cost Up To $20 Thousand Per Mo ...