Jim Cramer’s Latest Lightning Rounds: 15 Stocks to Watch

3. Zscaler, Inc. (NASDAQ:ZS)

Number of Hedge Fund Holders: 45

Zscaler, Inc. (NASDAQ:ZS) is a cloud security company that provides a suite of solutions designed to offer secure access for users and devices in a digital environment. Among its key offerings is Zscaler Internet Access, which enables secure connections to externally managed applications. Its Zscaler Private Access facilitates safe access to internal applications that reside in both data centers and cloud environments. The company’s Posture Control solutions focus on safeguarding data within public cloud frameworks, while its Cloud Infrastructure Entitlement Management prioritizes identity and privilege access management.

When asked about the stock, Cramer said, “I think Jay Chaudhry’s doing an okay job.” He mentioned that he likes Palo Alto and CrowdStrike better.

However, it is worth noting that, on October 5, Citi maintained its Buy rating on the stock and lowered the price target on Zscaler (NASDAQ:ZS) to $230 from $240. The firm made a note of the negative sentiment surrounding the company, along with execution risks anticipated in the latter half of the year, which has created a cautious outlook.

Citi started a “90-day positive catalyst watch” on the shares. Against a backdrop of lowered expectations and a discounted valuation, the firm maintains that it has confidence in its rating for the company.

In fiscal 2024, Zscaler (NASDAQ:ZS) reported revenue of $2.167 billion, a substantial 34% increase from the previous fiscal year. The figure not only surpassed management’s guidance of $2.141 billion at the midpoint but also highlights the company’s growth trajectory, as the guidance was raised three times during the year.

Management estimates that the company has an addressable market estimated of $96 billion. During the latest earnings call, CEO Jay Chaudhry emphasized the strong demand for the company’s zero-trust security solutions and commented that advancements in generative artificial intelligence are opening up new growth opportunities.