Z-scale (ZS) soared on Friday after the company reported fiscal fourth-quarter earnings, revenue and billings that easily beat Wall Street targets. And the company’s fiscal 2023 outlook for Zscaler shares appeared above.
ZS stock catapulted 21.9% to close at 188 trading today. The cybersecurity company released its July quarter results after the market closed on Thursday.
“Zscaler was the last (cybersecurity) company to report results in this earnings cycle, and clearly stood out as having the best results and strongest guidance,” said Wells Fargo analyst Andrew Nowinski, in a report.
He added, “The strong performance was largely a function of the company being purpose-built for this type of macro environment, where budgets are getting tighter and companies are looking for ways to cut costs. Zscaler can eliminate many point products and simplify the cyberinfrastructure, while reducing costs for the customer.”
ZS Stock: Earnings, Revenues Above Views
Prior to Zscaler’s earnings release, cybersecurity stock was down 54% in 2022.
The San Jose, Calif.-based company said earnings were 25 cents per share on an adjusted basis, up 78% from 14 cents a year earlier. In the July quarter, revenue rose 61% to $318.1 million, the company said.
Analysts had expected Zscaler to earn 21 cents per share on sales of $305.4 million. Additionally, billings rose 57% to $520.4 million from estimates of $467.2 million.
For fiscal 2023, which begins with the October quarter, Zscaler said it expects earnings of $1.17 per share amid its outlook, ahead of estimates of $1.04 per share. .
Zscaler said it expects revenue between $1.49 billion and $1.50 billion. Analysts had forecast revenue of $1.468 billion.
Zscaler Stock: Billing Forecast Exceeds Estimates
The company forecasts billings of $1.93 billion for fiscal year 2023, against estimates of $1.859 billion.
“Despite the uncertain macro landscape that continues to evolve, we continue to see favorable demand for our Zero Trust Exchange platform as it makes businesses more secure, simplifies IT and reduces costs,” said the CEO. Jay Chaudhry in the company’s earnings release.
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Heading into Zscaler’s earnings report, the company had a relative strength rating of 17 out of the best possible 99, according to IBD Stock Checkup.
Additionally, Zscaler provides cloud-based cybersecurity services through 150 data centers globally.
Zscaler’s web security gateways inspect customer data traffic for malware. The Zscaler Private Access, or ZPA, cloud service replaces virtual private networks, or VPNs, to support remote working.
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Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
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