Zscaler Has Prospects For Rapid Growth Why The Stock Is A Buy
Its quarterly revenue has grown well above 50% over the last three years, reaching 61.7% YoY in the previous quarter. Notably, it also doesn’t burn cash like some of its unprofitable SaaS peers. Instead, ZS is a solidly free cash flow profitable zero trust leader, with a highly impressive and consistent rule of 40, as seen above. Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns. Which received 73% of its total revenue from the U.S. for the quarter ended Oct. 31, 2021.
For one, part of trading is being able to get in and out of a stock easily. If the volume is too light, in absolute terms or for a relatively large position, it could be difficult to execute a trade. This is also useful to know when comparing a stock’s daily volume (which can be found on a ticker’s hover-quote) to that of its average volume.
Securities trading offered through Robinhood Financial LLC, a registered broker-dealer and Member SIPC. BMO Capital analyst Keith Bachman maintained Zscaler with an Outperform rating and lowered the price target from $415 to $270. Deutsche Bank analyst Patrick Colville maintained Zscaler with a Buy rating and lowered the price target from $430 to $280. Mizuho analyst Gregg Moskowitz maintained Zscaler with a Buy rating and lowered the price target from $360 to $350. Wells Fargo analyst Andrew Nowinski maintained Zscaler with an Overweight rating and lowered the price target from $400 to $350. Options are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses.
Zscaler has invested heavily in building a ‘Proxy’ based architecture which makes it possible to deeply inspect network traffic at an enormous scale, including SSL encrypted traffic. Zscaler as a proxy, take every box, open it, inspect the contents as we put it in a new box, then send it on to the recipient. Early innings of network, application and security transformation. Significant $72 billion annual total addressable market opportunity. Mutual Fund investments are subject to market risks, read all scheme related documents carefully. Data are provided ‘as is’ for informational purposes only and are not intended for trading purposes.
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According to Wall Street analysts Zscaler’s price is currently Undervalued. 3 Top Cybersecurity Stocks With Strong Upside Potential The stock market is all about themes and right now, given Russia’s invasion of Ukraine and all that… Jing Jun Ma is a tech and data expert with more than a decade of experience in digital marketing and programming.
The Historical Cash Flow Growth is the longer-term (3-5 year annualized) growth rate of the cash flow change. Once again, cash flow is net income plus depreciation and other non-cash charges. The Price to Cash Flow ratio or P/CF zscaler revenue is price divided by its cash flow per share. It’s another great way to determine whether a company is undervalued or overvalued with the denominator being cash flow. Enterprise Value is Market Capitalization + Debt – Cash.
- The 12 Week Price Change displays the percentage price change over the most recently completed 12 weeks .
- These are also high probability and workable set-ups with lower-risk entry points.
- Consequently, Zscaler believes that its critical competitive moat of being the “real” zero trust will set them apart from its field as the market understands zero trust better.
- I/we have a beneficial long position in the shares of ZS either through stock ownership, options, or other derivatives.
- A prospectus contains this and other information about the ETF and should be read carefully before investing.
- Valuing Zscaler stock is incredibly difficult, and any metric has to be viewed as part of a bigger picture of Zscaler’s overall performance.
However, Stephen Bersey, an analyst at Daiwa, is more cautious with a ‘neutral’ rating and a $266 price target. “While Zscaler’s recent sales growth results have been well above many of its peers, a 28x sales multiple more than accounts for its strong top-line growth and earnings potential,” Daiwa toldSeeking Alpha. The IT cloud security firm is tipped by analysts at Zacks to record earnings of $0.12 per share. Revenues are set to climb $212.23m, boosted by the increased digitalisation of businesses and more hybrid home/office working in the coronavirus pandemic. Zscaler said quarterly revenue increased 63% year-over-year to $255.56 million, which beat the $241.56 million estimate. The cloud-native cybersecurity company reported quarterly earnings of 13 cents per share, which beat the estimate of 11 cents per share.
Zscaler Stock Price Target Cut To $300 Vs $310 At Stifel
† The Equity Summary Score provided by Thomson Reuters StarMine is current as of the date specified. There may be differences between the Equity Summary Score analyst count and the number of underlying analysts listed. Due to the timing in receiving ratings changes into the Equity Summary Score model, the Equity Summary Score analyst count may lag the ratings count displayed by one or more days. There may also be analyst count variations for symbols with multiple share classes and ADRs.
Value investors will typically look for stocks with P/E ratios under 20, while growth investors and momentum investors are often willing to pay much more. Aside from using absolute numbers, however, you can also find value by comparing the P/E ratio to its relevant industry and its peers. In contrast, the net income that goes into the earnings portion of the P/E ratio does not add these in, thus artificially reducing the income and skewing the P/E ratio. Like the P/E ratio, a lower number is considered better. Our testing substantiates this with the optimum range for price performance between 0-20.
Please note that valuation analysis is one of the essential comprehensive assessments in business. It evaluates Zscaler’s worth, which you can determine by considering its current assets, liabilities and future cash flows. The investors’ valuation analysis is an important metric that will give you a perspective on different companies.
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The 52 Week Price Change displays the percentage price change over the most recently completed 52 weeks . The 12 Week Price Change displays the percentage price change over the most recently completed 12 weeks . The 4 Week Price Change displays the percentage price change for the most recently completed 4 weeks . The Daily Price Change displays the day’s percentage price change using the most recently completed close.
GAAP EPS refers to a company’s earnings per share for the trailing twelve-month period. EPS is calculated by dividing the adjusted income available to common stockholders for the trailing twelve months by the trailing twelve-month diluted weighted average shares outstanding. Zscaler Valuation Module provides a unique way to ballpark how much the company is worth today. It is done using both, our quantitative analysis of the company fundamentals as well as its intrinsic market price estimation to project the real value.
However, it’s still below our fair value estimates that we presented in our previous article. Thus, if you buy now, you could be entering at an attractive entry point for what we believe is the leading zero trust security player in the market. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.
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Zscaler, Inc., formerly known as SafeChannel Inc., is a cloud-based security solutions provider. This is used by investors to assess a stock’s market price relative to its earnings. Comparative valuation techniques use various fundamental indicators to help in determining Zscaler’s current stock value. Our valuation model uses many indicators to compare Zscaler value to that of its competitors to determine https://xcritical.com/ the firm’s financial worth. You can analyze the relationship between different fundamental ratios across Zscaler competition to find correlations between indicators driving Zscaler’s intrinsic value. Our valuation method for Zscaler is useful when determining the fair value of the Zscaler stock, which is usually determined by what a typical buyer is willing to pay for full or partial control of Zscaler.
It helps you know the worth of the potential investment in Zscaler and how it compares across the competition. Comparative valuation analysis is a catch-all model that can be used if you cannot value Zscaler by discounting back its dividends or cash flows. This model doesn’t attempt to find an intrinsic value for Zscaler’s Stock . Still, instead, it compares the stock’s price multiples to a benchmark or nearest competition to determine if the stock is relatively undervalued or overvalued. The P/E ratio is the most commonly used of these ratios because it focuses on the Zscaler’s earnings, one of the primary drivers of an investment’s value.
Zscaler Stock Analysis
He called the 2020 crash, the rise of AMD and the demise of Peloton. Now he says an odd shift is coming for the stock market. Debt to Capital (or D/C ratio) is the fraction of debt (including mortgages and long-term leases) to long-term capitalization. Enterprise Value / Earnings Before Interest, Taxes, Depreciation and Amortization is a valuation metric used to measure a company’s value and is helpful in comparing one stock to another. The VGM score is based on the trading styles of Growth, VAlue, and Momentum. The VGM Score are a complementary set of indicators to use alongside the Zacks Rank.
Zscaler Stock Price Target Raised To $400 From $320 At Wedbush
Short interest is important to track because it can act as an indicator of market sentiment towards a particular stock. Real Money’s message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site’s moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted.
The Price to Book ratio or P/B is calculated as market capitalization divided by its book value. (Book value is defined as total assets minus liabilities, preferred stocks, and intangible assets.) In short, this is how much a company is worth. Investors use this metric to determine how a company’s stock price stacks up to its intrinsic value. The detailed multi-page Analyst report does an even deeper dive on the company’s vital statistics.
Within the Finance Sector, it would fall into the M Industry of Banks & Thrifts. And within the M Industry, it might further be delineated into the X Industry group called Banks Northeast. This allows the investor to be as broad or as specific as they want to be when selecting stocks. The Growth Scorecard evaluates sales and earnings growth along with other important growth measures. This includes measuring aspects of the Income Statement, Statement of Cash Flows, the Balance Sheet, and more.
You should conduct research and perform a thorough investigation as to the characteristics of any securities you intend to purchase. Looking inside the numbers, calculated billings increased 59% to $367.7M. Cash provided by operations amounted to $48.3M, or 19% of revenue, while free cash flow totaled $29.4M (12% of revenue) compared to $18M (11% of revenue) for the year ago period. GAAP Net income came to $-100.4M down from $-67.5M a year ago. The number of shares of a security that have been sold short by investors. It is typically expressed as a percentage of the total number of shares outstanding and is reported on a monthly basis.
More details on Equity Summary Score calculation are included in the Understanding and Using the Equity Summary Score Methodology . Is trading significantly lower Friday after the company reported fiscal 2022 second-quarter financial results and issued guidance that disappointed some analysts. At this point, I have found five sell-side analysts that have opined on Zscaler since this release. There are four “buy” ratings or buy equivalents, and there is one “hold” rating (actually a “peer-perform”). The average target price across the five is $340.60 with a high of $418 and a low of $275 (Alex Zukin of Wolfe Research, our peer-perform).
We are maintaining our fair value estimate of $265 per share for narrow-moat Zscaler after it reported strong second-quarter results. Zscaler continues to achieve revenue expansion to the tune of 63% year over year behind secular tailwinds stemming from organizations making digital transformations and increased adoption of zero-trust security. That said, our model already incorporates robust growth. As expected, Zscaler’s expanded product offering has enabled it to not only up- and cross-sell but to increase switching costs for its existing customers. These factors were on display as its dollar-based net retention rate was above 125% for the quarter. Newer product ZDX has been a notable component in Zscaler’s ability to upsell large customers through its ZIA bundle.