On Thursday, Piper Sandler confirmed its Overweight rating on Zscaler (NASDAQ:ZS) with a steady price target of $255.00 for the shares. The firm's endorsement comes after Zscaler showcased its expansive platform capabilities during its annual Zenith Live user conference earlier this week.
The event highlighted Zscaler's growing network transformation business and introduced promising developments in data security and SecOps, which Piper Sandler believes could significantly scale the company's market opportunities.
The analyst from Piper Sandler expressed confidence in Zscaler's ability to compete in the Secure Access Service Edge (SASE) market, despite rising competition. The firm emphasized the company's existing scale and momentum, along with its strategic expansions into adjacent markets, as key factors that reinforce the resilience and growth potential of Zscaler's business model.
Zscaler, known for its comprehensive cloud-based security platform, has been actively expanding its service offerings. The latest features and expansions presented at Zenith Live are expected to further bolster Zscaler's position in the cybersecurity space by addressing emerging industry needs and customer requirements.
The reaffirmed price target of $255.00 reflects Piper Sandler's outlook on Zscaler's stock, suggesting a positive perspective on the company's future performance. Zscaler's consistent innovation and strategic market positioning remain central to Piper Sandler's optimistic valuation of the company's shares.
In summary, Piper Sandler's analysis points to Zscaler's sustained business growth and its ability to leverage new opportunities within the evolving cybersecurity landscape. The firm's reiterated Overweight rating indicates a belief in the company's continued market success and shareholder value creation.
In other recent news, Zscaler, a cloud security company, has announced expanded collaborations with Google (NASDAQ:GOOGL) and NVIDIA (NASDAQ:NVDA), and reported impressive Q3 results. Zscaler's partnership with Google aims to enhance Zero Trust security measures, providing improved threat and data protection for enterprise users, while eliminating the need for traditional VPNs. In conjunction with NVIDIA, Zscaler plans to integrate advanced AI technologies to bolster its cybersecurity services.
Analysts have provided varied responses to these developments. Canaccord Genuity adjusted its price target for Zscaler to $220, maintaining a Buy rating. Evercore ISI also adjusted the price target for Zscaler shares to $245, while TD Cowen maintained a Buy rating with a steady price target of $270.00, highlighting the company's 32% revenue growth.
Zscaler's Q3 results exceeded expectations with a 30% year-over-year increase in billings and a record operating margin, marking its first instance of GAAP profitability. The company also reported a robust Dollar-Based Net Retention rate and a 31% year-over-year growth in customers with an annual recurring revenue of over $1 million. These recent developments underscore the company's strong performance and strategic partnerships.
InvestingPro Insights
Piper Sandler's bullish stance on Zscaler (NASDAQ:ZS) is echoed by some key metrics and analyst expectations captured by InvestingPro. Analysts are forecasting a bright future for Zscaler with anticipated sales growth in the current year and a prediction that the company will turn profitable this year, as per InvestingPro Tips. These projections align with the company's impressive gross profit margin of 77.94% and a notable revenue growth of 37.16% over the last twelve months as of Q3 2024.
InvestingPro Data also reveals that Zscaler's market capitalization stands at $28.54 billion, with a high Price/Book multiple of 26.11, indicating a strong market belief in the value of the company's assets and future growth potential. Additionally, the company's liquid assets exceed short-term obligations, which suggests a solid financial position for addressing immediate liabilities.
Investors interested in a deeper dive into Zscaler's financial health and future prospects can find more than 12 additional InvestingPro Tips at https://www.investing.com/pro/ZS. To enhance your investing strategy with these insights, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
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