IT security firm Zscaler (ZS), defying the sharp market downturn today, is jumping 6.5% after reporting stronger-than-expected fiscal second-quarter results.
Investment bank Rosenblatt upgraded the shares to Buy in the wake of the company’s earnings.
The Highlights of Zscaler’s Results and Guidance
ZS reported that its revenue in its fiscal Q2 had jumped 23% versus the same period a year earlier to $648 million. The latter figure was $12.5 million above analysts’ average estimate. Its Q2 earnings per share, excluding certain items, came in at 78 cents, versus analysts’ average estimate of 69 cents.
The company provided full-year EPS guidance of $3.04 to $3.09, well above the mean estimate of $2.99.
Rosenblatt’s Take on ZS
Zscaler’s “Improved marketing… and growing sales productivity are driving more significant deals and up-sells,” Rosenblatt wrote in a note to investors. Based on the company’s recent successes, Rosenblatt believes that ZS “can sustain durable growth.”
The investment bank placed a $235 price target on the shares.
More Information About ZS
Analysts on average expect the company’s full-year EPS to climb 22% this year and 20% next year.
In the last month, the shares have risen 1.4% while they are little changed in the last three months.
While we acknowledge the potential of ZS, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ZS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
