Zscaler Inc hits a 20-day low amid market weakness
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 5d ago
0mins
Should l Buy ZS?
Source: Benzinga
Zscaler Inc's stock has declined by 3.00%, hitting a 20-day low, as the broader market shows signs of weakness with the Nasdaq-100 down 0.42% and the S&P 500 down 0.12%.
This decline is attributed to sector rotation, as Zscaler's stock has faced challenges despite being recognized as a leader in the IDC MarketScape for global life sciences HCP engagement. Analysts have mixed views, with Morgan Stanley lowering the price target while Mizuho upgraded its rating, indicating a complex market sentiment surrounding cybersecurity stocks.
The implications of this price movement suggest that while Zscaler maintains a strong position in its industry, the current market dynamics may require investors to reassess their expectations. The recognition in the IDC MarketScape could provide a foundation for future growth, but the stock's recent performance reflects broader market trends.
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Analyst Views on ZS
Wall Street analysts forecast ZS stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for ZS is 325.62 USD with a low forecast of 260.00 USD and a high forecast of 390.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
30 Analyst Rating
24 Buy
6 Hold
0 Sell
Strong Buy
Current: 169.390
Low
260.00
Averages
325.62
High
390.00
Current: 169.390
Low
260.00
Averages
325.62
High
390.00
About ZS
Zscaler, Inc. is a cloud security company. The Company has developed a platform incorporating core security functionalities needed to enable fast and secure access to cloud resources based on identity, context and an organization’s policies. Its Zscaler Zero Trust Exchange platform protects thousands of customers from cyberattacks and data loss by securely connecting users, devices, and applications in any location. Its solution is a purpose-built, multi-tenant, distributed cloud platform that incorporates the security functionality needed to enable users, applications, and devices to safely and efficiently utilize authorized applications and services based on an organization’s business policies. It delivers its solutions using a software-as-a-service (SaaS) business model and sells subscriptions to customers to access its cloud platform, together with related support services. It offers a security platform that combines its platform with automated security operations.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Cash Transaction Acquisition: Texas Instruments has signed a definitive agreement to acquire Silicon Labs for $231.00 per share in an all-cash transaction, representing a total enterprise value of around $7.5 billion, which will further expand Texas Instruments' market share in the semiconductor industry.
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- Strategic Implications: This acquisition not only strengthens Zscaler's product portfolio but also boosts its competitiveness in the rapidly growing cybersecurity market, addressing the increasing demand for security solutions.
- Technology Integration: By integrating SquareX's technology, Zscaler aims to enhance user browser security experiences, thereby reducing potential cyberattack risks and safeguarding customer data.
- Market Outlook: As enterprises increasingly prioritize cybersecurity, this acquisition is expected to create new growth opportunities for Zscaler, further expanding its market share.
See More
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- Stock Surge: Zscaler's shares rose 3.36% to $221.76 on Tuesday, reflecting strong market confidence in its newly launched AI-powered cybersecurity tools, indicating investor optimism about the company's growth potential.
- AI Security Threats: A report from Zscaler revealed that 100% of corporate AI systems studied had serious vulnerabilities, with most being breachable in as little as 16 minutes, highlighting the urgent need for companies to reassess their security strategies as they rapidly adopt AI tools.
- New Tool Launch: Zscaler's advanced cybersecurity solutions provide companies with a comprehensive view of their AI operations, including infrastructure, models, applications, and development operations, aimed at effectively addressing security threats in the AI era and enhancing market competitiveness.
- Market Demand: CEO Jay Chaudhry emphasized that business leaders are seeking comprehensive solutions rather than more point products, driving Zscaler's innovation in AI security and further solidifying its leadership position in the cybersecurity market.
See More
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- Poor Year-to-Date Performance: Year-to-date, Intuit has declined approximately 17.9%, highlighting the challenges the company faces in a competitive market environment, which may impact investor confidence.
- Market Dynamics: In contrast to Intuit, Atlassian's shares dropped 2.9% today, while Zscaler rose by 5.3%, reflecting varying market reactions to different tech companies, which could influence investor asset allocation strategies.
- Investor Sentiment: The ongoing decline of Intuit may prompt investors to reassess their positions in tech stocks, particularly as current economic conditions heighten focus on profitability and growth potential.
See More
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- Approaching Breakeven: Zscaler reported a loss of $41 million in its most recent financial year, with analysts predicting a final loss in 2026 before turning a profit of $2.1 million in 2027, indicating a positive trend towards breakeven.
- Growth Rate Expectations: To achieve profitability by 2027, Zscaler must maintain an average annual growth rate of 46%, reflecting analysts' confidence in the company's future; however, slower growth could delay profitability.
- High Debt Risk: Zscaler's debt level is relatively high at 86% of equity, significantly exceeding the 40% threshold, necessitating stricter capital management and increasing investment risks.
- Market Focus: While Zscaler's growth potential is noteworthy, its current investment phase and high debt levels may affect investor confidence, necessitating close monitoring of future financial performance and market dynamics.
See More
