By Senad Karaahmetovic
Shares of Zscaler (NASDAQ:ZS) are up over 13% after the company delivered reported stronger-than-expected earnings and guidance.
ZS reported an EPS of $0.25 on revenue of $318.1 million to top the analyst estimate of $0.21 on sales of $305.43 million.
"Despite the uncertain macroeconomic landscape which continues to evolve, we continue to see favorable demand for our Zero Trust Exchange platform because it makes businesses more secure, simplifies IT, and reduces cost,” said Jay Chaudhry, Chairman and CEO of Zscaler.
For this quarter, the cybersecurity company expects EPS of $0.26 on revenue in the range of $339 million - $341 million, better than the consensus estimate of $0.22 on revenue of $324.8 million.
For the full year of 2023, ZS sees EPS to be in the range of $1.16 - $1.18, easily ahead of the estimate of $1.06. Revenue is expected in the range of $1.49 billion to $1.5 billion, again better than the consensus estimate of $1.47 billion.
A Morgan Stanley analyst said the results were “strong” and delivered against “increasingly bearish sentiment.”
“ZS delivered a strong FQ4 result with accelerating 57% billings growth and FY23 outlook ahead of consensus. We see plenty of room for upside in forward estimates helping to sustain premium multiple,” the analyst told clients in a note.
A Wolfe Research analyst raised the price target to $211 from $204 to reflect “strong revenue and billings growth.”
“We walk away with greater conviction in management's ability to navigate the current macro environment and our upside model calls for 48% billings growth for FY23. We firmly believe that ZS remains one of the best assets in our security coverage as the company continues to transform the network security market as organizations migrate to the cloud,” the Wolfe Research analyst wrote in a note.