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Zscaler’s Stock Declines Despite Analysts’ Positive Assessment of Q4 Results

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Zscaler’s Stock Declines Despite Analysts’ Positive Assessment of Q4 Results
Zscaler headquarters in Silicon Valley

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Zscaler’s stock (NASDAQ:ZS) experienced a decrease of approximately 1.5% in pre-market trading on Wednesday following the release of the company’s fourth-quarter results and guidance. Despite the decline, several Wall Street analysts have praised the company’s performance.

According to Wedbush Securities analyst Dan Ives, the results and guidance indicate a “strong momentum” as Zscaler continues to expand its presence in the zero-trust space while maintaining impressive profit margins.

“Despite the challenging macroeconomic environment, Zscaler has demonstrated resilience with its strong quarter and guidance. Its zero-trust SaaS applications and cloud workload protection have continued to achieve success. We consider Zscaler to be a leading player in this field as the demand for cloud cybersecurity solutions accelerates over the next 12-18 months,” wrote Ives in an investor note. As a result, Ives has increased his price target on Zscaler’s stock from $160 to $185.

BMO Capital Markets analyst Keith Bachman, who also holds an outperform rating, raised his price target following the release of the results. Bachman stated that the results showcased “healthy revenue growth” and expressed confidence in Zscaler’s ability to deliver solid performance in the future, given the expanding total addressable market.

Looking ahead, Zscaler anticipates generating first-quarter revenue between $472 million and $474 million, with adjusted earnings per share ranging from 48 to 49 cents. For the full year, Zscaler expects sales to be in the range of $2.05 billion to $2.065 billion, with billings between $2.52 billion and $2.56 billion. Adjusted earnings are forecasted to be between $2.20 and $2.25 per share.