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Zscaler Inc (NASDAQ: ZS) is among the best plays in cloud security, a market that still seems to be in the early stages of success, Wedbush said after the company reported third-quarter results.
Daniel Ives maintained an Outperform rating on Zscaler and raised the price target from $68 to $82.
The global cloud-based information security company reported third-quarter results that weresignificantly ahead of expectations. Total revenue growth came in at a whopping 61 percent year-on-year, while billings growth of 55 percent crushed Street expectations, Ives said in a Friday note. (See his track record here.)
The results highlighted Zscaler’s ability to capitalize on cross- and up-selling opportunities that are likely to drive growth in the fourth quarter and 2020, the analyst said.
Zscaler is at an inflection point, as enterprises worldwide are beginning their cloud migration journey, driving the need for “the highly differentiated security and speed the company has to offer,” he said.
Ives said he expects “massive tailwinds” for the company’s cloud native network security approach through 2020, given the robust quarterly performance, the raised billings outlook for 2019 and Wedbush’s bullish field checks.
Talks with CIOs suggest a growing need to secure applications, data and consumers, which highlights a “golden market opportunity” for Zscaler through 2019 and beyond, according to Wedbush.
Zscaler shares were falling by 7.19 percent to $67.74 at the time of publication Friday.
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