On Friday, BMO (TSX:BMO) Capital Markets maintained its Outperform rating on Zscaler Inc . (NASDAQ:ZS) with a steady price target of $208.00. The firm's stance remained unchanged following attendance at Zscaler's Zenith Live 24 event in Las Vegas. During the event, Zscaler showcased fewer new product innovations compared to previous years. BMO Capital interpreted this as Zscaler's strategic focus on integrating and unifying its platform as the company aims to extend its reach beyond its Secure Access Service Edge (SASE) offerings.
The firm expressed a growing confidence in Zscaler's potential to penetrate markets outside its core SASE market. Despite the fewer product announcements, the analyst's perspective on the company's prospects improved after the event. BMO Capital's analysis suggests that Zscaler's current strategy could be beneficial in the long term as it seeks to consolidate its platform and expand its market influence.
Zscaler's approach to expanding beyond SASE and enhancing platform integration aligns with BMO Capital's outlook on the company's growth trajectory. The firm's reiterated Outperform rating indicates a belief in Zscaler's performance and a positive forecast for its stock value.
The price target of $208.00 set by BMO Capital remains in place, signaling a steady confidence in Zscaler's market position and financial outlook. The firm has not modified its estimates or target price after the Zenith Live 24 event, suggesting that the current strategy employed by Zscaler aligns with BMO Capital's expectations for the company's success.
In other recent news, Zscaler, a cloud security company, has maintained a positive trajectory, with several key developments. The company's Q3 results exceeded expectations, reporting a 30% year-over-year increase in billings and a record operating margin, marking its first instance of GAAP profitability. Zscaler's Dollar-Based Net Retention rate remained robust, indicating strong upsell activities, which contributed to a 31% year-over-year growth in customers with an annual recurring revenue of over $1 million.
Zscaler has also expanded collaborations with Google (NASDAQ:GOOGL) and NVIDIA (NASDAQ:NVDA). The partnership with Google aims to enhance Zero Trust security measures, providing improved threat and data protection for enterprise users. In conjunction with NVIDIA, Zscaler plans to integrate advanced AI technologies to bolster its cybersecurity services.
A number of analyst firms have responded to these developments. Piper Sandler confirmed its Overweight rating on Zscaler with a steady price target of $255.00, underscoring the company's strategic growth. Canaccord Genuity (TSX:CF) adjusted its price target for Zscaler to $220, maintaining a Buy rating, while Evercore ISI also adjusted the price target for Zscaler shares to $245. TD (TSX:TD) Cowen maintained a Buy rating with a steady price target of $270.00, highlighting the company's 32% revenue growth.
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