On Friday, TD Cowen maintained a positive outlook on Zscaler (NASDAQ:ZS), a leader in cloud security, reiterating a Buy rating and a stable price target of $270.00. The firm's confidence in Zscaler is buoyed by several key growth indicators observed during a recent meeting with the company's Chief Financial Officer and Vice President of Investor Relations & Strategic Finance.
The meeting highlighted that Zscaler's non-scheduled billings continue to grow at a robust rate of 20%. This growth is a significant factor in the firm's assessment. Additionally, improvements in the company's go-to-market (GTM) organization have provided management with enough visibility to guide expectations for a reacceleration of growth in the second half of the year.
Another positive note from the meeting was the stability of the pricing landscape for Zscaler's services. The company's Zero Trust security portfolio is gaining solid traction in the market, which is a testament to its competitive positioning and the effectiveness of its offerings.
TD Cowen's reiterated price target of $270 indicates a sustained confidence in Zscaler's market performance and future prospects. The firm's outlook is based on tangible growth metrics and strategic organizational developments within Zscaler, which are expected to drive the company's performance going forward.
In other recent news, Zscaler, a cloud security company, announced the appointment of Adam Geller as its new Chief Product Officer. Geller's extensive experience in cybersecurity is expected to enhance the company's product innovation and growth.
Zscaler also reported robust financial results for its fourth fiscal quarter of 2024, with revenues surpassing consensus estimates by over 4% and earnings per share reaching $0.88. However, Zscaler's fiscal 2025 revenue and profit forecasts fell short of Wall Street predictions.
In analyst news, Baird and Wedbush maintained their 'outperform' rating on Zscaler, expressing confidence in the company's future. Conversely, Bernstein adjusted its price target for Zscaler shares to $238.00 but still maintained an Outperform rating.
On the strategic front, Zscaler and CrowdStrike (NASDAQ:CRWD) announced new integrations aimed at enhancing cybersecurity operations through advanced threat detection, response, and risk management. The collaboration introduces the Falcon Foundry for Zscaler app and Zscaler Risk360™, which pulls in detailed incident, asset, and vulnerability data from CrowdStrike.
InvestingPro Insights
To complement TD Cowen's positive outlook on Zscaler (NASDAQ:ZS), recent data from InvestingPro provides additional context to the company's financial position and market performance. Zscaler's revenue growth remains strong, with a 34.07% increase over the last twelve months as of Q4 2024, aligning with the firm's observation of robust non-scheduled billings growth. This is further supported by an impressive gross profit margin of 78.08%, underscoring the company's efficiency in delivering its cloud security services.
InvestingPro Tips highlight that Zscaler holds more cash than debt on its balance sheet, which could provide financial flexibility as the company pursues growth opportunities. Additionally, analysts predict that Zscaler will be profitable this year, potentially marking a turning point for the company which has not been profitable over the last twelve months.
While Zscaler's stock has seen a 9.35% price return over the past year, it's currently trading at 65.34% of its 52-week high, suggesting potential room for growth in line with TD Cowen's bullish price target. Investors seeking a more comprehensive analysis can find 11 additional InvestingPro Tips for Zscaler, offering deeper insights into the company's financial health and market position.
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