Shares of cloud-based information security provider Zscaler (NASDAQ:ZS) fell over 5% in after-hours trading today after the company reported earnings for its first quarter of Fiscal Year 2024. Adjusted earnings per share came in at $0.67, beating analysts’ consensus estimate of $0.49.
Sales increased by 39.7% year-over-year, with revenue hitting $496.7 million. This beat analysts’ expectations by $23.3 million.
Looking forward, management now expects revenue and adjusted earnings per share for Q2 2024 to be in the ranges of $505 million to $507 million and $0.57 to $58, respectively. Both estimates are higher than analysts’ expectations of $497.3 million in revenue and EPS of $0.52.
For Fiscal Year 2024, Zscaler projects revenue to land between $2.09 billion and $2.10 billion, higher than consensus estimates of $2.06 billion. Furthermore, the company said it expects EPS to be in the range of $2.45 to $2.48, which is higher than consensus expectations of $2.24.
Is Zscaler a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on ZS stock based on 24 Buys and seven Holds assigned in the past three months, as indicated by the graphic below. After a 74.16% rally in its share price this year, the average ZS price target of $194.03 per share implies 1.10% upside potential.
