Core Insights - Zscaler is set to report its fourth-quarter fiscal 2025 results on September 2, 2025, with anticipated revenues between $705 million and $707 million, reflecting a year-over-year growth of 19.1% [1][9] - The company expects non-GAAP earnings per share in the range of 79-80 cents, indicating a year-over-year decline of 9% [2][9] - Zscaler has consistently beaten earnings estimates in the past four quarters, with an average surprise of 18.7% [3][9] Revenue and Earnings Expectations - The Zacks Consensus Estimate for Zscaler's fiscal fourth-quarter revenues is $706.2 million [1] - The earnings per share estimate has remained unchanged at 80 cents over the past 60 days [2] Growth Drivers - The expected revenue growth is attributed to Zscaler's security and networking solutions, particularly in the context of the expanding global security market [6] - Strong momentum with Global 2000 and Fortune 500 customers, driven by digital transformation and hybrid work trends, is likely to be a key catalyst [7] - The adoption of Software-Defined Wide Area Network (SD-WAN) solutions is projected to contribute significantly, with the market expected to grow from $5.36 billion in 2024 to $80.91 billion by 2034, at a CAGR of 31.6% [8] Customer Retention and Product Performance - Zscaler's core products, including Zscaler Internet Access and Zscaler Private Access, have been crucial for customer retention [10] - Other offerings such as Cloud Access Security Broker and Cloud Security Posture Management are also expected to enhance customer acquisition [10] Competitive Landscape - Zscaler faces intense competition from established players like Palo Alto Networks, CyberArk, and CrowdStrike, particularly in areas like Agentic Operations and Zero Trust Strategy [16][17] - The company is increasing investments in sales and marketing, as well as research and development, to maintain its competitive edge [18] Stock Performance and Valuation - Zscaler's shares have increased by 55.4% year-to-date, outperforming the Zacks Security industry's growth of 11.5% [12] - The stock is currently trading at a forward 12-month price-to-sales ratio of 13.51X, compared to the industry's 12.39X [13] Long-term Outlook - The demand for cybersecurity solutions across various industries positions Zscaler favorably for long-term growth [15] - However, near-term challenges related to profit growth suggest a cautious approach for new investments, while existing shareholders may consider holding [19]

Core Viewpoint - Cybersecurity providers are expected to remain resilient amid market volatility caused by tariffs, as cybercriminal activities continue unabated. Investors are encouraged to consider four leading cybersecurity stocks this month [1]. Group 1: Palo Alto Networks - Palo Alto Networks is transitioning from a next-generation firewall provider to a comprehensive cybersecurity platform, implementing a "platformization" strategy to consolidate customers onto three main platforms [3]. - The strategy has resulted in 1,150 of its top 5,000 customers adopting one of its platforms, with a target of 2,500 to 3,500 by fiscal year 2030. Growth is also seen in its Cortex threat detection and response solution and Prisma Cloud [4]. - Although the platformization strategy temporarily slowed growth, it is expected to yield long-term benefits for investors [5]. Group 2: CrowdStrike - CrowdStrike is positioned to benefit from companies consolidating their cybersecurity needs onto a single platform, being a leader in endpoint security [6]. - The company offers a comprehensive suite of cybersecurity solutions, with 67% of customers deploying five or more modules and 21% using eight or more [8]. - With the impact of a previous IT outage behind it, CrowdStrike is expected to see growth accelerate, making it an attractive investment opportunity [9]. Group 3: Zscaler - Zscaler is a leader in zero-trust security, emphasizing continuous verification of users and devices for secure access [10]. - The company has successfully upsold its zero-trust systems and reported a 40% increase in annual contract value for its data security products, with overall revenue growing 23% year over year [12]. - Zscaler's strong net dollar retention rate of 115% indicates robust growth within its existing customer base, positioning it well for future success [12]. Group 4: SentinelOne - SentinelOne is a rapidly growing endpoint cybersecurity company with a low forward price-to-sales multiple of 6.6, despite achieving 29% revenue growth last quarter [13]. - The partnership with Lenovo, the world's largest enterprise PC vendor, to ship computers with SentinelOne's Singularity Platform is a significant opportunity [14]. - The company is also successfully upselling its Purple AI, which enhances security operations through hyper-automation, indicating a promising future [15][16].