Analyst Tal Liani from Bank of America Securities reiterated a Buy rating on Zscaler (ZS – Research Report) and increased the price target to $285.00 from $240.00.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Tal Liani’s rating is based on Zscaler’s robust performance and promising future prospects. The company demonstrated strong third-quarter results, with billings and revenue growth surpassing market expectations. This growth was driven by enhanced sales productivity, the introduction of new products, and overall billings expansion. Although there was a slight contraction in margins, this was attributed to the timing of new product launches rather than a fundamental business model change.
Zscaler’s positive trends are further highlighted by a significant increase in unscheduled billings and new customer acquisitions, which are crucial for sustainable growth. The company’s revenue diversification is progressing well, with emerging products contributing significantly to the annual recurring revenue. Despite a minor sequential decline in net retention rate, management’s focus on the annual contract value metric reflects the economic value generated with customers. Additionally, improvements in sales productivity and strategic acquisitions, such as Red Canary, position Zscaler well for future innovation and market expansion.
In another report released today, KeyBanc also reiterated a Buy rating on the stock with a $310.00 price target.
Based on the recent corporate insider activity of 43 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of ZS in relation to earlier this year.