“ZS reports strong third-quarter results, beating expectations with 30% revenue growth (8 percentage points growth despite significant challenges) GTM headwinds) and other profitability indicators were significantly higher than expected,” UBS analysts Roger Boyd and Dean Marriott said in a note.
UBS rates Zscaler a Buy and maintains a $270 price target on the stock.
Stifel also rates Zscaler a Buy but has a lower price target of $220.
Stifel analysts Adam Borg and Brad Reback said: “We continue to believe that zero trust is an important priority in cybersecurity and Zscaler’s leading product portfolio can help improve an organization’s security posture, drive vendor consolidation and reduce costs.” ” Looking forward, we believe Zscaler has many drivers to sustain growth and margin expansion of at least 20%+ in the coming years.”
Stifel also noted that cybersecurity companies have outperformed other software companies this earnings season. The company will take a closer look at industry leader CrowdStrike (CRWD) when it releases its report next Tuesday to better understand the overall cybersecurity industry.
RBC Capital maintained its outperform rating on Zscaler, but also raised its price target to $230 from $215 following the latest results.
Meanwhile, Mizuho reiterated its buy rating but lowered its price target to $220 from $240.
“Mizuho believes ZS remains in good growth shape and its unique cloud proxy security architecture should enable it to thrive in an increasingly digital world,” the company said in a report.
