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

Anthony Lee /
2023/09/04 6:53 am EDT

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

Last quarter Zscaler reported revenues of $418.8 million, up 46% year on year, beating analyst revenue expectations by 1.71%. It was a strong quarter for the company, with revenue and earnings pers share (EPS) topping expectations. We were also glad that the revenue guidance for the next quarter exceeded consensus estimates.

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 35.4% year on year to $430.6 million, slowing down from the 61.4% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.49 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 5.18%.

Looking at Zscaler's peers in the cybersecurity segment, some of them have already reported Q4 earnings results, giving us a hint what we can expect. Palo Alto Networks delivered top-line growth of 26% year on year, missing analyst estimates by 0.23% and SentinelOne reported revenues up 45.8% year on year, exceeding estimates by 5.98%. Palo Alto Networks traded up 7.6% on the results, SentinelOne was up 9.9%.

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

Investors in the cybersecurity segment have had steady hands going into the earnings, with the stocks down on average 0.59% over the last month. Zscaler is up 9.07% during the same time, and is heading into the earnings with analysts' average price target of $168.3, compared to share price of $158.5.

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.