Why Are Zscaler Shares Trading Higher Premarket?

Analysts raised their price targets on Zscaler Inc ZS post Q1 beat.

• Needham analyst Alex Henderson maintained a Strong Buy and raised the price target from $390 to $418, implying a 20.5% upside.
• Piper Sandler analyst Rob Owens raised the price target to $365 from $285, implying a 5.2% upside, and reiterated a Neutral. 
• Zscaler continues to execute amid a favorable security backdrop and ongoing network transformation initiatives, posting a growth acceleration and the most significant revenue beat in nearly three years as the company surpasses the $1 billion annual recurring revenue mark for the first time. His Neutral rating reflects valuation.
• JMP Securities analyst Erik Suppiger raised the price target to $400 from $330, implying a 15.3% upside, and maintained an Outperform. 
• The analyst is optimistic about the company having sustained its billings growth in the low-70% range for the fourth consecutive quarter, reflecting continuing "market shift to cloud-based secure access." 
• Suppiger further cites Zscaler accelerating its investment in operations to sustain its robust growth, with the management also laying out an "aggressive" goal to reach $5 billion in annual recurring revenue.
• Mizuho analyst Gregg Moskowitz raised the price target to $400 from $385 and affirmed a Buy.
• BTIG analyst Gray Powell raised the price target to $439 from $401, implying a 26.5% upside, and kept a Buy.
• Zscaler is firing on all cylinders right now, with companies rapidly adopting cloud-based network security architectures and zero trust while driving elevated demand for its core ZIA and ZPA products.
• UBS analyst Roger Boyd raised the price target to $380 from $295, implying a 9.5% upside, but maintained a Neutral.
• Price Action: ZS shares traded higher by 5.98% at $367.73 in the premarket session on the last check Wednesday.