Zscaler (ZS) has reported better-than-expected results for the fourth quarter of Fiscal Year 2021 on the back of robust top-line growth. Shares of the cloud-based security solutions provider gained 2.5% in extended trade on Thursday.
The company’s Q4 revenues climbed 57% year-over-year to $197.1 million and surpassed analysts’ expectations of $186.8 million. Zscaler reported a 70% rise in calculated billings during the quarter.
Meanwhile, its adjusted EPS of $0.14 also beat the Street’s estimates of $0.09. The figure compares favorably with $0.08 per share in the same quarter last year. (See Zscaler stock charts on TipRanks)
The Chairman and CEO of Zscaler, Jay Chaudhry, said, “We continue to invest and innovate across all our product pillars and help our customers adopt a Zero Trust architecture designed to secure the cloud and mobile world.”
Looking ahead, the company projects Q1 revenue in the range of $210 million to $212 million. It anticipates Adjusted EPS of $0.12 per share.
For Fiscal Year 2022, revenue is anticipated to be in the range of $940 million to $950 million with calculated billings of $1.23 billion to $1.25 billion. Adjusted EPS is expected to be between $0.52 and $0.56 per share.
Following the release, JMP Securities analyst Erik Suppiger maintained a Buy rating on Zscaler and raised the price target to $330 from $270. The new price target implies 17.8% upside potential from the current level.
Suppiger said, “We believe Zscaler leverages differentiated capabilities within its flagship secure internet access offering, it has favorable competitive dynamics, a dominant leadership position, and is poised to significantly expand into adjacent growth markets, allowing for further penetration of the existing customer base.”
Overall, the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating based on 11 Buys and 4 Holds. The average Zscaler price target of $280.67 implies 0.16% upside potential.
According to TipRanks’ Smart Score rating system, Zscaler gets a 6 out of 10, which indicates that the stock is likely to perform in line with market averages.
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