Analysts Bump Up Price Targets On Zscaler Ahead Of Q1 Results


Analysts raised their price targets on Zscaler Inc ZS ahead of its Q1 earnings. Zscaler is a security-as-a-service firm that offers its customers cloud-delivered solutions for protecting user devices and data. 

  • Needham analyst Alex Henderson raised the price target to $390 from $345, implying a 10% upside, and reiterated a Strong Buy. 
  • The Cloud Direct model of Security and Application Access is "superior" to the "broken" legacy perimeter defense/Enterprise Network client-server architecture employed over 35-40 years. 
  • Zscaler is the most advanced in delivering this new architecture. 
  • While the stock faces a "valuation challenge" at 35-times expected 2023 sales, Henderson continues to see upside for Zscaler shares.
  • RBC Capital analyst Matthew Hedberg raised the price target to $380 from $326, implying a 7% upside, and maintained an Outperform. 
  • The analyst expects the company to deliver upside to expectations based on favorable partner checks, continued bullish hiring data, and strong results from security peers.
  • Zscaler is well-positioned to disrupt legacy security spending and stands to benefit as COVID has accelerated the mega-trends such as cloud adoption, digital transformation, and zero-trust security by up to five years, Hedberg adds.
  • Price Action: ZS shares traded higher by 4.82% at $353.14 on the last check Monday.
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