Zscaler price target lowered to $165 from $275 at Credit Suisse

Credit Suisse lowered the firm’s price target on Zscaler to $165 from $275 and keeps an Outperform rating on the shares. While Zscaler reported solid results with revenue well ahead of consensus driven by increased platform purchases and strong growth in the expansion business with NRR above 125%, FY23 billings guidance, a key focus, was raised by just $5M despite a $33M raise in FY23 revenue guidance, which is likely why management did not reiterate 20%+ free cash flow margin guidance, the analyst tells investors in a research note. The firm does not view updated FY23 billings guidance as material to the Zscaler thesis.