Market Overview

Bank Of America Upgrades Zscaler Following Big Sell-Off

Share:
Bank Of America Upgrades Zscaler Following Big Sell-Off

Zscaler Inc’s (NASDAQ: ZS) shares have declined by a massive 48% since July, while the company appears well-positioned to sustain high growth, according to Bank of America.

The Analyst

BofA’s Daniel Bartus upgraded Zscaler from Neutral to Buy while raising the price target from $65 to $68.

The Thesis

There are several key trends that support an outperformance by Zscaler’s stock, Bartus said in the note.

The analyst expects the adoption of software-defined wide area network (SD-WAN) to grow, as all enterprises were looking to cut down multiprotocol label switching (MPLS) costs. He added that Zscaler’s SD-WAN architecture helps customers lower MPLS costs by around 60%.

“By outsourcing the network security to Zscaler’s cloud, customers can realize equipment/data center cost savings, better network performance, simplified security management, and often achieve better security,” Bartus wrote.

He further mentioned that this scenario was true both for direct customers and for firms delivering Zscaler as a managed service.

Bartus said that the company could reach revenues of $2 billion in 2025. He explained that while growth in the secure web gateway (SWG) market represented an $800 million revenue opportunity for Zscaler in 2025, the company could also benefit from “increased traction with other recently added security services.”

Price Action

Shares of Zscaler were up 9.18% to $50.57 at the time of publishing on Monday.

Latest Ratings for ZS

DateFirmActionFromTo
Dec 2019AssumesOverweightNeutral
Dec 2019MaintainsOutperform
Dec 2019ReiteratesBuy

View More Analyst Ratings for ZS
View the Latest Analyst Ratings

Posted-In: Bank of America Daniel Bartus SWGAnalyst Color Upgrades Price Target Analyst Ratings Tech

 

Related Articles (ZS)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
DNKNGuggenheimMaintains86.0
KSURaymond JamesReiterates188.0
DLTRKeyBancDowngrades
MSCitigroupDowngrades
WTRB of A SecuritiesDowngrades
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com