Zscaler Q1 Preview: Growth Drivers, Macro Challenges, And Data Protection Focus
Portfolio Pulse from Surbhi Jain
Zscaler Inc (NASDAQ:ZS) is set to report Q1 FY2024 earnings with expectations of 49 cents EPS and $474.31 million in revenue. The company focuses on AI-based security enhancements and data protection, with projected 33% YoY revenue growth for Q1 and 27-28% for the full year. Despite a challenging macro environment, Zscaler remains cash flow positive with a 121% net retention rate. Analysts are interested in Zscaler's integrated product initiatives and data protection growth. Consensus analyst ratings are a Buy, with a price target of $188.47. Shares closed higher at $193.09. Peers like Fortinet Inc (NASDAQ:FTNT), Cloudflare Inc (NYSE:NET), and Palo Alto Networks (NASDAQ:PANW) also face macro challenges but are adapting strategies.
November 27, 2023 | 1:54 pm
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NEGATIVE IMPACT
Fortinet Inc faces increased deal scrutiny and sales cycle changes, shifting focus to SASE, which may have a neutral to slightly negative short-term impact on its stock.
The article suggests Fortinet is experiencing challenges, but its strategic shift to SASE could mitigate negative impacts.
CONFIDENCE 70
IMPORTANCE 50
RELEVANCE 60
NEUTRAL IMPACT
Cloudflare Inc has faced soft growth due to sales issues in its SASE business but is working through these problems, which could lead to a neutral short-term impact.
Cloudflare is addressing its sales issues, indicating potential for stabilization or improvement in the short term.
CONFIDENCE 70
IMPORTANCE 50
RELEVANCE 60
NEUTRAL IMPACT
Palo Alto Networks faces rising capital costs but is adapting with strategic customer incentives, which may have a neutral to slightly positive short-term impact.
Palo Alto Networks is implementing strategies to counteract the negative effects of rising capital costs, which could support the stock price.
CONFIDENCE 70
IMPORTANCE 50
RELEVANCE 60
POSITIVE IMPACT
Zscaler is expected to report strong Q1 FY2024 earnings with a focus on AI and data protection, which could positively influence its stock price in the short term.
Positive earnings expectations and analyst ratings suggest a bullish outlook for Zscaler, which may lead to a short-term stock price increase.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100