Zscaler (ZS) Q2 Earnings: What To Expect

Adam Hejl /
2022/02/23 6:34 am EST

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

Last quarter Zscaler reported revenues of $230.5 million, up 61.6% year on year, beating analyst revenue expectations by 8.59%. It was an exceptional quarter for the company, with a very optimistic guidance for the next quarter and an impressive revenue growth.

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

This quarter analysts are expecting Zscaler's revenue to grow 54% year on year to $241.8 million, in line with the 55% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.11 per share.

Zscaler Total Revenue

The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 6.01%.

Looking at Zscaler's peers in the cybersecurity segment, some of them have already reported Q2 earnings results, giving us a hint what we can expect. Palo Alto Networks (NYSE:PANW) delivered top-line growth of 29.5% year on year, beating analyst estimates by 2.74% and Qualys (NASDAQ:QLYS) reported revenues up 15.8% year on year, exceeding estimates by 1.2%. Qualys was down 14.3%. Read our full analysis of Palo Alto Networks's results here and Qualys's results here.

It seems that the volatility in the software stocks has somewhat calmed down for now, with stocks down on average 1.85% over the last month. Zscaler is up 12.3% during the same time, and is heading into the earnings with analyst price target of $307.7, compared to share price of $257.1.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.