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.