Zscaler, Inc ZS held its primary tradeshow event in Las Vegas, including numerous breakouts on product and technology, keynotes from management, customers, and partners, and an analyst breakout session with management.
Needham analyst Alex Henderson saw adoption is accelerating, performance is continually improving, and the IT World is increasingly adopting a Cloud Direct Security and Application Architecture.
The analyst appreciated ZScaler not seeing any slowdown in business globally due to economic concerns.
He believes its ability to help companies transition to a Cloud Direct, Zero-Trust architecture enables companies to cut costs, improve agility, transition to the cloud/execute digital transformations, and improve user experiences.
Henderson had a Strong Buy rating with a price target of $185.
Mizuho analyst Gregg Moskowitz highlighted ZScaler's new Workload Posture Control solution that serves the emerging Cloud-Native Application Protection Platform (CNAPP) market.
More broadly, he remains confident that ZScaler is exceptionally well-positioned for growth. Its unique cloud proxy security architecture should enable it to thrive in an increasingly digital-enabled world.
Moskowitz also expects significant monetization improvements, mainly as newer offerings (ZDX/ ZCP) gain further traction. He reiterated Buy and $210 PT.
Wells Fargo analyst Andrew Nowinski highlighted that the new solution, Posture Control, for cloud workloads would augment the company's Workload Communication solution.
Zscaler also announced an expanded partnership with Amazon.com Inc AMZN Amazon Web Service, which includes the new Posture Control solution and the Zero Trust Exchange integration into AWS Wavelengths for 5G networks.
Finally, management reassured them they were not slowing hiring despite the increasing threat of a recession.
Nowinski believes Zscaler can maintain strong growth and profitability, though he was concerned about potential multiple compression if the overall macro continues to decline. He reiterated an Overweight rating and $200 PT.
Price Action: ZS shares traded higher by 9.22% at $162.66 on the last check Thursday.
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