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Zscaler’s Q1 Results Beat Expectations; Shares Surge

Shares of Zscaler, Inc. (ZS) jumped 4.6% in the extended trading session on Tuesday after the cloud-based information security company reported upbeat results for the first quarter of Fiscal 2022. 

Results in Detail 

The company reported earnings of $0.14 per share in Fiscal Q1, topping the consensus estimate of $0.12 per share. Results were in line with earnings recorded in the same quarter last year. 

Total revenue of $230.5 million surpassed the Street’s estimate of $208.43 million. The company recorded a year-over-year rise in revenue of 62%.  

While deferred revenue grew 74% year-over-year to $647.8 million, calculated billings stood at $247.7 million, up 71%. (See Zscaler stock charts on TipRanks) 

CEO Comments 

The CEO of Zscaler, Jay Chaudhry, said, “CISOs and CIOs are looking to phase out legacy network security in favor of zero trust architecture, due to increasing cyber and ransomware risks and accelerating digital transformation. This architecture shift continues to drive strong demand for our Zero Trust Exchange platform.” 

“We recently achieved a significant milestone of surpassing $1 billion in annual recurring revenue (ARR), and are now focusing on achieving $5 billion in ARR,” Chaudhry added. 

Guidance 

For Fiscal Q2, the company projects total revenue to be in the range of $240 million to $242 million, versus the consensus estimate of $221.15 million. Adjusted earnings per share are expected to be $0.11, versus analysts’ expectations of $0.12 per share.  

For the Fiscal Year 2022, the company projects adjusted EPS to be in the range of $0.50 to $0.52 per share, versus analysts’ expectations of $0.56. Total revenue is expected to land between $1 billion and $1.01 billion, versus the consensus estimate of $0.94 billion. 

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Wall Street’s Take  

Following the upbeat results, JMP Securities analyst Erik Suppiger maintained a Buy rating and increased the price target to $400 (15.28% upside potential) from $330. 

The rest of the Street is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on 17 Buys and 7 Holds. The average Zscaler price target of $340.17 implies 2% downside potential. Shares have gained 80.9% over the past six months.   

Bloggers Weigh In 

TipRanks data shows that financial blogger opinions are 86% Bullish on Zscaler, compared to a sector average of 69%.

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