Zscaler Earnings: What To Look For From ZS

Petr Huřťák /
2024/05/29 3:03 am EDT

Cloud security platform Zscaler (NASDAQ:ZS) will be reporting earnings tomorrow after market close. Here's what you need to know.

Zscaler beat analysts' revenue expectations by 3.6% last quarter, reporting revenues of $525 million, up 35.4% year on year. It was a very strong quarter for the company, with an impressive beat of analysts' revenue, billings and EPS estimates.

Is Zscaler a buy or sell going into earnings? Read our full analysis here, it's free.

This quarter, analysts are expecting Zscaler's revenue to grow 28% year on year to $536.1 million, slowing from the 46% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.65 per share.

Zscaler Total Revenue

The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Zscaler has a history of exceeding Wall Street's expectations, beating revenue estimates every single time over the past two years by 4.5% on average.

Looking at Zscaler's peers in the cybersecurity segment, some have already reported their Q1 results, giving us a hint as to what we can expect. Palo Alto Networks delivered year-on-year revenue growth of 15.3%, meeting analysts' expectations, and Varonis reported revenues up 6.2%, in line with consensus estimates. Palo Alto Networks traded down 3.8% following the results while Varonis's stock price was unchanged.

Read our full analysis of Palo Alto Networks's results here and Varonis's results here.

Investors in the cybersecurity segment have had steady hands going into earnings, with share prices up 1.3% on average over the last month. Zscaler is down 5.5% during the same time and is heading into earnings with an average analyst price target of $246.7 (compared to the current share price of $163.5).

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