Zscaler price target raised to $180 from $170 at Morgan Stanley

Morgan Stanley raised the firm’s price target on Zscaler to $180 from $170 and keeps an Equal Weight rating on the shares. The fiscal Q1 topline beat was “solid,” but fell short of higher buyside expectations after a greater than 30% move in shares over the last quarter, the analyst tells investors. For FY24, management “surprisingly” left the billings outlook unchanged at 24%-26% year-over-year growth despite the 3% billings beat in Q1, in order to reflect additional conservatism from a change in sales leadership, including the appointment of a new Chief Revenue Officer, noted the analyst. While the firm thinks Mike Rich is “a solid hire” that should help Zscaler scale longer term, the changes could also bring potential go-to-market disruption nearer term.