Zscaler (ZS) To Report Earnings Tomorrow: Here Is What To Expect

Anthony Lee /
2023/03/01 4:19 am EST
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Cloud security platform Zscaler (NASDAQ:ZS) will be reporting results tomorrow after market hours. Here's what investors should know.

Last quarter Zscaler reported revenues of $355.5 million, up 54.2% year on year, beating analyst revenue expectations by 4.34%. Despite the stock dropping on the results, it was a very strong quarter for the company, with exceptional revenue growth 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 42.7% year on year to $364.8 million, slowing down from the 62.7% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.29 per share.

Zscaler Total Revenue

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 5.97%.

Looking at Zscaler's peers in the cybersecurity segment, some of them have already reported Q2 earnings results, giving us a hint of what we can expect. Palo Alto Networks delivered top-line growth of 25.7% year on year, beating analyst estimates by 0.34% and Qualys reported revenues up 19.2% year on year, exceeding estimates by 0.55%. Palo Alto Networks traded up 5.44% on the results, Qualys was down 0.63%. Read our full analysis of Palo Alto Networks's results here and Qualys's results here.

Investors in the software segment have had steady hands going into the earnings, with the stocks down on average 1.53% over the last month. Zscaler is up 5.1% during the same time, and is heading into the earnings with analyst price target of $165.7, compared to share price of $130.49.

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.