Cloud security platform Zscaler (NASDAQ:ZS) will be reporting earnings tomorrow after market close. Here's what investors should know.
Last quarter Zscaler reported revenues of $286.8 million, up 62.5% year on year, beating analyst revenue expectations by 5.64%. It was a very strong quarter for the company, with an exceptional revenue growth and a 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 55% year on year to $305.5 million, in line with the 56.5% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.21 per share.
Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. 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 6.63%.
Looking at Zscaler's peers in the cybersecurity segment, some of them have already reported Q4 earnings results, giving us a hint of what we can expect. Palo Alto Networks delivered top-line growth of 27.1% year on year, beating analyst estimates by 0.42% and CrowdStrike reported revenues up 58.4% year on year, exceeding estimates by 3.62%. Palo Alto Networks traded up 6.15% on the results, and CrowdStrike was flat on the results. Read our full analysis of Palo Alto Networks's results here and CrowdStrike's results here.
Technology stocks have been hit hard on fears of higher interest rates and while some of the software stocks have fared somewhat better, they have not been spared, with share price declining 14.1% over the last month. Zscaler is down 12.1% during the same time, and is heading into the earnings with analyst price target of $206.7, compared to share price of $145.
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.