ZS) is set to release its Q4/20 results on 9 September after the market close.” data-reactid=”12″>Cloud security stock Zscaler (ZS) is set to release its Q4/20 results on 9 September after the market close.
Matthew Hedberg has reiterated his ZS buy rating while ramping up his price target from $130 to $141, citing peer group multiple expansion.” data-reactid=”13″>Ahead of this key date, RBC Capital’s Matthew Hedberg has reiterated his ZS buy rating while ramping up his price target from $130 to $141, citing peer group multiple expansion.
“We expect Zscaler to deliver strong Q4/20 results on 9/9 with a focus on COVID tailwinds, ZIA run-rate, ZPA attach, continued execution and the balance of growth/leverage in the initial FY/21 guide” cheered the analyst.
He noted that investor sentiment has been positive following Q3/20 results on 5/28 as shares are +72% vs. security peers +14% and the S&P 500 +11%.
Specifically, Hedberg is expecting upside vs. consensus revenue/EPS at $118.6M/ $0.03 (+38% revenue growth) with revenue closer to $121.4M based on average revenue outperformance of $3.4M over the last four quarters.
“We’ll be looking for follow-through from Q3/20 results which reflected improved sales execution, accelerated security transformations that often precede digital transformations and look to gauge the sustainability of trends around work-from-home” the analyst commented.
Other important data points include guidance and TTM (trailing twelve month) net dollar retention. For FY/21 guidance vs. consensus revenue/EPS comes in at $556.1M/$0.28, or +31% vs. +40% for FY/20E.
See ZS stock analysis on TipRanks)” data-reactid=”23″>Taking a step back from earnings, Hedberg believes Zscaler’s cloud security platform is well positioned to disrupt $20B of legacy security spend that could be more than $35B by 2024. (See ZS stock analysis on TipRanks)
“While mega- trends such as cloud adoption, digital transformation and zero-trust security are well-established, we believe COVID could accelerate these trends by up to five years, which could point to continued upside to estimates” the analyst told investors on September 7.
price target indicates 8% upside potential lies ahead.” data-reactid=”25″>Shares in ZS have surged an incredible 188% year-to-date, and as a result analysts have a cautiously optimistic Moderate Buy consensus. ZS has received 7 recent buy ratings, offset by 4 hold ratings. Meanwhile the $145 average analyst price target indicates 8% upside potential lies ahead.
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