Freedom Capital Reiterates Buy on Zscaler (ZS) After Strong Q1 Results

Core Viewpoint - Zscaler Inc. is experiencing strong performance driven by robust demand for its cybersecurity solutions, leading to a positive outlook from analysts [1][2]. Financial Performance - Zscaler delivered strong fiscal Q1 2026 results, outperforming both estimates and management's guidance [2]. - The company has raised its revenue and earnings forecasts for FY2026 following the Q1 outperformance, while medium and long-term projections remain largely unchanged [4]. Revenue Growth Drivers - Revenue growth is primarily attributed to the expansion of the Zero Trust Everywhere initiative and the cloud-native security platform Zero Trust Exchange [3]. - Additional growth catalysts include the expansion of the AI security stack and enhanced data protection modules [3]. Strategic Focus - The company is making strategic trade-offs to capture market share in high-growth areas such as AI safety and expanded Zero Trust architectures [4]. - Management's guidance for Q2 FY2026 aligns with market consensus, indicating confidence in continued growth [4]. Analyst Sentiment - Freedom Capital Markets analyst Almas Almaganbetov reiterated a Buy rating on Zscaler with a price target of $320.00, reflecting optimism about the company's strategic execution [1].