Zscaler Delivers Upbeat Q4 Guidance: 7 Analysts Cut Forecasts On ‘Incremental Risk’
Shares of Zscaler Inc (NASDAQ:ZS) tanked in early trading on Wednesday, even after the company reported upbeat fiscal fourth-quarter results.
The company reported its results amid an exciting earnings season. Here are some key analyst takeaways.
- Goldman Sachs analyst Gabriela Borges maintained a Neutral rating, while slashing the price target from $189 to $177.
- Cantor Fitzgerald analyst Yi Fu Lee reiterated a Neutral rating, while reducing the price target from $200 to $170.
- Needham analyst Alex Henderson reaffirmed Strong Buy rating, while cutting the price target from $290 to $235.
- Piper Sandler analyst Rob Owens maintained an Overweight rating, while reducing the price target from $255 to $215.
- Oppenheimer analyst Ittai Kidron reiterated an Outperform Buy rating, while cutting the price target from $260 to $230.
- Scotiabank analyst Patrick Colville reaffirmed a Sector Outperform rating, while reducing the price target from $210 to $195.
- BMO Capital Markets analyst Keith Bachman maintained an Outperform rating, while trimming the price target from $208 to $197.
- KeyBanc Capital Markets analyst Eric Heath reiterated an Overweight rating and price target of $164.
- RBC Capital Markets analyst Matthew Hedberg reaffirmed an Outperform rating and price target of $230.
- JMP Securities analyst Trevor Walsh maintained a Market Outperform rating and price of $270.
- Stifel analyst Adam Borg reiterated a Buy rating and price target of $220.
- Truist Securities analyst Joel Fishbein reaffirmed a Buy rating and price target of $260.
Check out other analyst stock ratings.
Goldman Sachs: Zscaler reported its quarterly billings and revenues 2% and 4% higher than Street expectations. It guided fiscal 2025 billings growth of 19%-20%, 1% above the consensus. Revenue growth of 21% is in-line with estimates, Borges said in a note. However, earnings guidance remains 15% below the Street, possibly due to an increase in non-GAAP income taxes to $140 million.
Zscaler expects billings to be weighted toward the second half of fiscal 2025, the analyst stated. “We also believe the company is seeing an ongoing structural shift to enterprise business, which drives more back-end loaded fiscal years, and is also being impacted by a ramping sales productivity cycle,” she further wrote.
Cantor Fitzgerald: Zscaler delivered “a strong finish” to fiscal 2024, Lee said. While the billings guidance for fiscal 2025, reflecting 19% growth at the midpoint to $3.123 billion, met the consensus, it came in “short of what we believe the investor/buyside expectation to be,” he added.
“Zscaler expects F1H25 y/y billings growth to target 13% after exiting the quarter at 26.6% and 28.9% for FY24,” the analyst wrote. This means …
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