On Wednesday, Stifel analysts maintained a Buy rating on Zscaler stock (NASDAQ:ZS) with a price target of $235.00, above the current trading price of $206.50. The cybersecurity company, currently valued at $31.8 billion, is trading near its InvestingPro Fair Value. The firm’s analyst Adam Borg anticipates positive results for Zscaler’s second quarter of fiscal year 2025, which are to be reported after market close on March 5, 2025. His optimism is based on stronger mid-quarter checks, solid end-of-quarter checks, and historical trends, suggesting potential for upside results.
Borg’s focus for the upcoming earnings report is on the extent of the second quarter’s performance and the structure of the full-year guidance for FY25. He notes that expectations for the year are skewed towards the latter half due to the sales pipeline, anticipated ramp in sales productivity, and the pattern of contracted non-cancellable billings. InvestingPro data shows impressive revenue growth of 30.77% over the last twelve months, with a robust gross profit margin of 78.03%. Despite adjusting the billings seasonality estimates for the third and fourth quarters of FY25, Borg acknowledges that sentiment towards Zscaler remains mixed. He also points out that Zscaler’s shares have often traded lower the day after earnings announcements, with declines observed in six out of the last nine quarters.
The Stifel analyst expects the earnings call to address several key topics, including demand trends across various industry verticals, guidance for FY25, updates on the search for a new Chief Financial Officer, and traction in go-to-market strategies following leadership changes. Additionally, the call is likely to cover new product announcements, opportunities in artificial intelligence, competitive dynamics, and product adoption trends.
Investors and analysts will be looking closely at Zscaler’s financial results and forward-looking statements to gauge the company’s performance and strategic direction. The upcoming earnings report will provide insights into Zscaler’s operational progress and its ability to navigate the competitive landscape in the cybersecurity sector.
In other recent news, Zscaler has been the subject of several noteworthy developments. Mizuho (NYSE:MFG) Securities has raised the company’s stock target to $225, maintaining a neutral rating. This adjustment follows improved quarterly performance indicators and suggests a stronger operational outcome for Zscaler. Meanwhile, Bernstein SocGen Group has reiterated an Outperform rating for the company, maintaining a $238.00 price target despite concerns surrounding billing growth.
In addition, Zscaler has revamped its 2018 Equity Incentive Plan after approval from its stockholders. The Amended and Restated 2018 Plan facilitates the grant of various stock-related awards and aligns with the company’s commitment to long-term growth and value creation. In other developments, Nokia (HE:NOKIA) has adopted Zscaler’s Zero Trust Exchange platform to enhance its cloud security and operational efficiency.
Lastly, following the 2025 CIO Survey, Piper Sandler analysts have maintained an Overweight rating for Zscaler, suggesting that the company is well-positioned to benefit from increased focus on cloud and data security. These recent developments underscore the dynamic environment in which Zscaler operates, with analysts demonstrating cautious optimism about the company’s potential.
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