Core Insights - CrowdStrike Holdings (CRWD) reported a strong start to fiscal 2026 with a free cash flow (FCF) margin increase to 25% from 23% in the previous quarter, generating $279 million in free cash flow despite incurring $61 million in outage-related expenses [1][10] Financial Performance - The company's revenue grew 20% year over year to $1.1 billion in the fiscal first quarter, driven by the adoption of the Falcon Flex platform, with over 820 customer accounts utilizing this model [2] - CrowdStrike achieved a deal value milestone of $3.2 billion within two years of launching Falcon Flex, reflecting a 31% sequential growth and over six times year-over-year growth [2][10] Strategic Initiatives - A strategic realignment in May 2025 focused on reallocating investments into growth areas such as cloud, identity, exposure management, AI, and Next-Gen Security Information and Event Management, which is expected to enhance platform resilience and add at least 1% to its non-GAAP operating margin target in fiscal 2027 [3] - The company aims to exceed 30% in free cash flow margins by fiscal 2027 if the current pace of platform gains and Flex adoption continues [4] Competitive Landscape - Competitors like Zscaler (ZS) and SentinelOne (S) are also evolving their platforms to meet enterprise security demands, with Zscaler reporting an annual recurring revenue (ARR) of $2.9 billion, up 23% year over year [5][6] - SentinelOne experienced a 24% year-over-year growth in ARR in the first quarter of fiscal 2026, driven by the adoption of its AI-first Singularity platform [7] Valuation Metrics - CrowdStrike's shares have increased by 47.5% year to date, outperforming the security industry's growth of 25.6% [8] - The company trades at a forward price-to-sales ratio of 24.14X, significantly higher than the industry's average of 15.06X [11] - The Zacks Consensus Estimate for CRWD's fiscal 2026 earnings indicates a year-over-year decline of 10.94%, while fiscal 2027 earnings are projected to grow by 34.68% [14]

Core Insights - Palo Alto Networks (PANW) is successfully implementing its platformization strategy, leading to significant customer adoption across its product offerings in network, cloud, and security operations [1][4] - The company added over 90 new platformized deals in Q3 of fiscal 2025, totaling approximately 1,250 platformizations among its top 5,000 accounts [1][10] - Large transactions indicate a willingness among customers to invest in unified platforms, with notable deals including a $90 million contract with a global consulting firm and a $46 million deal with a financial services firm [2][3] Customer Adoption and Growth Potential - Customers utilizing multiple PANW platforms increased by nearly 70% year over year in Q3 [4] - Management aims for platformization to contribute significantly to its $15 billion Next-Gen Security Annual Recurring Revenue (ARR) target by fiscal 2030, with 60-70% expected from platformized customers [4] - Currently, only about 2% of PANW's over 70,000 customers are fully platformized, indicating substantial growth potential [4][10] Competitive Landscape - Competitors like Zscaler and SentinelOne are also enhancing their platforms to meet enterprise security needs [5] - Zscaler reported an ARR of $2.9 billion, growing 23% year over year, with its Zero Trust Exchange platform becoming a key growth driver [6] - SentinelOne achieved a 24% year-over-year growth in ARR, driven by the adoption of its AI-first Singularity platform [7] Financial Performance and Valuation - PANW shares have increased by 12.5% year to date, compared to the security industry's growth of 23.5% [8] - The company trades at a forward price-to-sales ratio of 12.92X, which is lower than the industry's average of 14.85X [12] - The Zacks Consensus Estimate for PANW's fiscal 2025 and 2026 earnings suggests year-over-year growth of 15.1% and 11.2%, respectively, with recent upward revisions in estimates [15]

Core Viewpoint - Market volatility driven by macro uncertainty necessitates a focus on stocks with strong long-term return potential, supported by top Wall Street analysts' recommendations [1][2] Group 1: Nvidia (NVDA) - Nvidia reported market-beating results for Q1 of fiscal 2026, maintaining confidence in AI infrastructure demand despite chip export restrictions [3][4] - JPMorgan analyst Harlan Sur reiterated a buy rating with a price target of $170, noting solid revenue despite a $4.5 billion write-down related to H20 inventory [4][6] - Excluding H20 shipments, data center revenue is projected to grow 16% quarter over quarter, driven by strong customer spending on AI projects [5][6] - Demand for Nvidia's Blackwell platform is strong, expected to exceed supply for several quarters, supported by mega data center deals [6][7] Group 2: Zscaler (ZS) - Zscaler's fiscal Q3 results surpassed expectations, driven by demand for its Zero Trust Exchange platform and AI security needs [8][9] - JPMorgan analyst Brian Essex reaffirmed a buy rating and raised the price target to $292, highlighting the company's raised full-year outlook for revenue and profitability [9][11] - The number of customers with over $1 million in annual recurring revenue increased by 23% year over year, positioning Zscaler to exceed $3 billion in ARR [11][12] - The acquisition of Red Canary is viewed positively, expected to enhance Zscaler's IP and threat intelligence capabilities [12] Group 3: Salesforce (CRM) - Salesforce reported better-than-expected revenue and earnings for Q1 of fiscal 2026 and raised its full-year forecast, alongside an $8 billion acquisition of Informatica [13][14] - TD Cowen analyst Derrick Wood reiterated a buy rating with a price target of $375, noting strong demand signals from the company's renewed focus on sales capacity growth [14][16] - AI adoption is accelerating, with Data Cloud and AI ARR rising over 120% year over year, indicating strong traction for the Agentforce offering [15][16] - Salesforce is increasing its workforce aggressively, signaling positive demand and growing sales pipelines [16][17]

Core Insights - Zscaler reported strong third-quarter fiscal 2025 results, with non-GAAP earnings of 84 cents per share, exceeding the Zacks Consensus Estimate by 12% and reflecting an 18.3% year-over-year increase driven by revenue growth and cost management [1][3] - The company's revenues for the third quarter reached $678 million, surpassing the Zacks Consensus Estimate by 1.8% and management's guidance, marking a 23% year-over-year growth [2][3] - Following the positive results, Zscaler raised its fiscal 2025 guidance, which is expected to positively impact its stock performance [3] Financial Performance - Zscaler's calculated billings increased by 25% year over year to $784.5 million, with the Americas contributing 54% of revenues, EMEA 30%, and Asia Pacific and Japan 16% [4] - The non-GAAP gross profit rose by 20.8% year over year to $544.15 million, while the non-GAAP gross margin contracted by 100 basis points to 80% [7] - Total non-GAAP operating expenses accounted for 58.6% of revenues, increasing by 21% year over year to $397.5 million, resulting in a non-GAAP operating income of $146.7 million [7] Customer Metrics - Zscaler added multiple large customers across its offerings, achieving a net 12-month trailing dollar-based retention rate of 114% [5] - The company had 642 customers with annualized recurring revenues (ARR) of $1 million or more, and 3,363 customers with ARR exceeding $100,000 at the end of the third quarter [6] Balance Sheet and Cash Flow - As of April 30, 2025, Zscaler had $1.99 billion in cash and short-term investments, down from $2.88 billion as of January 31, 2025 [8] - The company generated operating cash flow of $211.1 million and free cash flow of $119.5 million during the third quarter [8] Updated Guidance - Zscaler revised its fiscal 2025 revenue forecast to a range of $2.659-$2.661 billion, up from $2.640-$2.654 billion, indicating a growth of 22.18% from fiscal 2024 [9] - The company expects calculated billings to be in the range of $3.184-$3.189 billion, an increase from the previous guidance [9] - Non-GAAP earnings per share for fiscal 2025 are now projected between $3.18 and $3.19, compared to the previous guidance of $3.04-$3.09 [10]

Core Insights - Zscaler Inc reported better-than-expected third-quarter financial results, with revenue of $678.03 million, surpassing the consensus estimate of $666.86 million and adjusted earnings of 84 cents per share, exceeding analyst estimates of 75 cents per share [1][2] Financial Performance - The company expects fourth-quarter revenue to be between $705 million and $707 million, slightly below the estimate of $707.61 million, with anticipated adjusted earnings of 79 to 80 cents per share [2] - Zscaler raised its full-year 2025 outlook, projecting revenue of $2.659 billion to $2.661 billion, compared to estimates of $2.65 billion, and adjusted earnings of $3.18 to $3.19 per share, exceeding estimates of $3.07 per share [3] Market Reaction - Following the earnings announcement, Zscaler shares fell by 1% to close at $251.11 [3] Analyst Ratings - Rosenblatt analyst Catharine Trebnick maintained a Buy rating on Zscaler and raised the price target from $235 to $315 [6] - Needham analyst Mike Cikos also maintained a Buy rating and increased the price target from $240 to $310 [6]