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4 Reasons Why This Zscaler Analyst Is Turning Bullish: 'Q1 Feedback Is Positive'

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4 Reasons Why This Zscaler Analyst Is Turning Bullish: 'Q1 Feedback Is Positive'

Cybersecurity company Zscaler Inc (NASDAQ:ZS) is considered a “Top Pick on the Zacks Analyst Blog.”

It’s also a leader in the SASE (Secure Access Service Edge) market, which is still in its "early innings," according to KeyBanc Capital Markets analyst Eric Heath.

The Zscaler Analyst: Heath upgraded the rating for Zscaler to Overweight, while establishing a price target of $220.

The Zscaler Thesis: The new price target reflects a "modest premium" to the over 20% growth group, Heath said in the upgrade note.

Check out other analyst stock ratings.

The analyst mentioned four reasons for the upgrade:

  • While the landscape remains competitive, concerns are easing.
  • The are catalysts to SASE adoption in the near term. "The Ivanti VPN vulnerability exploits, SASE tied #4 priority in our 1Q24 VAR survey (vs. #10 last quarter), and ongoing weakness in firewall suggests network security budgets may orient toward SASE."
  • The channel and survey feedback during the first quarter has been positive.
  • The stock is currently trading in-line with the over 20% growth group versus its historical two-year premium.

ZS Price Action: Shares of Zscaler had risen by 2.23% to $176.81 at the time of publication on Thursday.

Image: Shutterstock

Latest Ratings for ZS

DateFirmActionFromTo
Mar 2022Daiwa CapitalUpgradesUnderperformBuy
Feb 2022BMO CapitalMaintainsOutperform
Feb 2022Deutsche BankMaintainsBuy

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