Cloud security platform Zscaler (NASDAQ:ZS) will be reporting results tomorrow after market close. Here’s what to look for.
Zscaler beat analysts’ revenue expectations by 2.1% last quarter, reporting revenues of $647.9 million, up 23.4% year on year. It was a very strong quarter for the company, with an impressive beat of analysts’ annual recurring revenue estimates and an impressive beat of analysts’ EBITDA estimates.
Is Zscaler a buy or sell going into earnings? Read our full analysis here, it’s free.
This quarter, analysts are expecting Zscaler’s revenue to grow 20.6% year on year to $667 million, slowing from the 32.1% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.76 per share.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Zscaler has missed Wall Street’s revenue estimates twice over the last two years.
Looking at Zscaler’s peers in the cybersecurity segment, some have already reported their Q1 results, giving us a hint as to what we can expect. Palo Alto Networks delivered year-on-year revenue growth of 15.3%, beating analysts’ expectations by 0.5%, and Qualys reported revenues up 9.7%, topping estimates by 1.8%. Palo Alto Networks traded down 6.9% following the results while Qualys’s stock price was unchanged.
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 share prices up 8.5% on average over the last month. Zscaler is up 14.5% during the same time and is heading into earnings with an average analyst price target of $245.50 (compared to the current share price of $256.20).
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