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Zscaler was rising in premarket trading Friday after the software security company posted quarterly earnings that topped analysts’ forecasts and issued an outlook for current-quarter revenue ahead of estimates.
The stock was rising 3.69% to $290.55 early Friday. It has gained 40.3% so far this year and 118% over the past 12 months.
Wedbush analyst Dan Ives called Zscaler ‘s report “another jaw-dropper quarter,” adding that “in our opinion, ZS is the best pure play in the cloud security arena.”
Zscaler (ticker: ZS) reported adjusted earnings in the fiscal fourth quarter of 14 cents a share on revenue of $197.1 million. A year earlier, the cybersecurity company reported adjusted profit of 8 cents a share on revenue of $125.9 million.
Billings in the quarter – a metric closely watched by analysts – jumped 70% to $332.2 million.
Analysts had been calling for earnings of 9 cents a share on revenue of $186.8 million. Billings were forecast at $278.1 million.
Zscaler said it expects fiscal first-quarter revenue of $210 million to $212 million, above forecasts of about $200 million. The company expects adjusted earnings of 12 cents a share, in line with estimates.
For fiscal 2022, Zscaler said it expects revenue of $940 million to $950 million, and billings of $1.23 billion to $1.25 billion.
Analysts at RBC raised their price target on shares of Zscaler to $326 from $300 and maintained their outperform rating.
“Zscaler delivered another impressive quarter with minimal year-over-year billings and revenue deceleration against tough comps as all results were well above expectations,” the analysts said. “Initial FY/22 revenue/billings guidance was above expectations, but should prove conservative based on recent execution and the efficiency of the company’s land and expand motion.”
“In our opinion, ZS is the best pure play in the cloud security arena, which we believe is still in the very early innings of taking off with overall hybrid cloud workloads poised to meaningfully accelerate over the coming years and in this climate could see some strategic deals moved forward as the shift to cloud outside the firewall is catalyzing a handful of key sales cycles,” Ives wrote in a note to clients.
Wedbush maintained its outperform rating on the stock and $320 price target.
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