Zscaler: Temporary Weakness Presents An Opportunity (Rating Upgrade)

Zscaler's Performance and Market Context - Zscaler's share price has declined recently due to weak guidance for the first half of FY25 [1] - The company is experiencing a growth slowdown, which has impacted investor sentiment [1] Narweena's Investment Philosophy - Narweena focuses on identifying market dislocations caused by a poor understanding of businesses' long-term prospects [1] - The firm seeks excess risk-adjusted returns by targeting businesses with secular growth opportunities in markets with barriers to entry [1] - Narweena's research emphasizes company and industry fundamentals to uncover unique insights [1] - The firm has a high risk appetite and a long-term investment horizon, targeting deeply undervalued stocks [1] - Narweena's strategy is influenced by demographic trends such as an aging population, low population growth, and stagnating productivity growth [1] - The firm believes that industries facing stagnation or secular decline may see improved business performance if competition decreases [1] - Conversely, some businesses may face rising costs and diseconomies of scale [1] - Narweena notes a shift towards asset-light businesses and a decline in the need for infrastructure investments [1] - A large pool of capital is chasing a limited set of investment opportunities, driving up asset prices and compressing risk premia over time [1] Richard Durant's Background - Richard Durant holds undergraduate degrees in engineering and finance from the University of Adelaide (Honors) and an MBA from Nanyang Technological University (Dean's Honors List) [1] - He has passed the CFA exams [1]