Zscaler (ZS) To Report Earnings: Here Is What To Expect
Cloud security platform Zscaler (NASDAQ:ZS) will be announcing earnings results. Here's what to look for.
Last quarter Zscaler reported revenues of $455 million, up 43.1% year on year, beating analyst revenue expectations by 5.7%. It was an awesome "beat and raise" quarter. Zscaler exceeded analysts' billings, revenue, and non-GAAP operating profit expectations. We were also glad that next quarter's revenue and non-GAAP operating profit guidance both came in higher than Wall Street's estimates. The one thing to potentially pick on is that its revenue guidance for next year suggests a deceleration in revenue, although profit margins are increasing.
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 33.2% year on year to $473.4 million, slowing down from the 54.2% 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.
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 5.2%.
Looking at Zscaler's peers in the cybersecurity segment, some of them have already reported Q1 earnings results, giving us a hint what we can expect. Palo Alto Networks delivered top-line growth of 20.1% year on year, beating analyst estimates by 1.9% and Qualys reported revenues up 13.1% year on year, exceeding estimates by 0.7%. Palo Alto Networks traded down 10.3% on the results, Qualys was flat on the results.
Read our full analysis of Palo Alto Networks's results here and Qualys's results here.
There has been positive sentiment among investors in the cybersecurity segment, with the stocks up on average 12% over the last month. Zscaler is up 23.1% during the same time, and is heading into the earnings with analyst price target of $194.8, compared to share price of $193.09.
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.
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The author has no position in any of the stocks mentioned.
