Cloud security platform Zscaler (NASDAQ:ZS) will be announcing earnings results tomorrow afternoon. Here's what to expect.
Last quarter Zscaler reported revenues of $387.6 million, up 51.7% year on year, beating analyst revenue expectations by 6.26%. Despite the stock dropping on the results, it was a very strong quarter for the company, with a solid beat of analyst estimates and very optimistic guidance for the next quarter.
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 43.5% year on year to $411.7 million, slowing down from the 62.6% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.42 per share.
The analysts covering the company have been growing increasingly bullish about the business heading into the earnings, with revenue estimates seeing 19 upwards revisions over the last thirty days. 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 5.93%.
Looking at Zscaler's peers in the cybersecurity segment, only Tenable has so far reported results, delivering top-line growth of 18.5% year on year, and beating analyst estimates by 0.91%. The stock was down 13.5% on the results. Read our full analysis of Tenable's earnings results here.
There has been positive sentiment among investors in the cybersecurity segment, with the stocks up on average 15.4% over the last month. Zscaler is up 55.7% during the same time, and is heading into the earnings with analyst price target of $153.6, compared to share price of $135.45.
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.