On Tuesday, Rosenblatt Securities adjusted its outlook on Zscaler shares (NASDAQ:ZS), increasing the price target to $285 from the previous $245, while maintaining a Buy rating on the stock. The firm's analyst cited positive feedback from Chief Information Security Officers (CISOs) and partners, indicating a strong focus on Secure Service Edge (SSE (LON:SSE)) and Secure Access Service Edge (SASE) Zero-Trust initiatives, which Zscaler continues to lead in amidst a competitive landscape.
Zscaler is set to report its second-quarter fiscal 2024 earnings on February 29, 2024, and will hold a conference call at 4:30 p.m. ET to discuss the details. Ahead of this, Rosenblatt has revised its fiscal year 2024 and 2025 estimates for Zscaler upwards. The firm's confidence is bolstered by the company's successful proof-of-concept demonstrations and a robust pipeline entering the quarter, with Federal sector checks indicating particular strength.
The analyst anticipates that Zscaler's revenue performance will surpass both the company's guidance of $505 million to $507 million and the 31% year-over-year growth expected by the firm and other Street estimates. Billings are also projected to exceed the anticipated 23% year-over-year increase. Based on these factors, it is expected that Zscaler's management will revise its revenue and operating margin forecasts upward for the fiscal year 2024.
Rosenblatt's positive stance reflects the continued success of Zscaler's zero trust multi-product offerings with customers. The company's ability to execute in the competitive landscape, coupled with strong partner support, has contributed to its ongoing winning streak in the cybersecurity market.
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