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ZS

BofA names stay-at-home favorites

Bank of America sees the current stay-at-home environment in the U.S. boosting some companies in the long term as the need to be prepared for pandemics becomes part of business strategies. "The resulting shift in traffic from office environments to home connections impacts the network, security, and collaboration choices that IT managers now face," notes BofA's Tai Liani. "While we believe major trends such as cloud migration and employee mobility have helped prepare enterprise networks for such events, we highlight the key technologies that enable remote workers," adds Liani. The basket of stay at home beneficiaries includes BlackBerry (NYSE:BB), Broadcom (NASDAQ:AVGO), Citrix (NASDAQ:CTXS), CrowdStrike (NASDAQ:CRWD), Intel (NASDAQ:INTC), Netflix (NASDAQ:NFLX), Palo Alto Networks (NYSE:PANW), Zoom Video (NASDAQ:ZM), Zscaler (NASDAQ:ZS) and Cisco (NASDAQ:CSCO).

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Zscaler gains bull on long-term tailwind

Dougherty & Co. starts Zscaler (NASDAQ:ZS) with a Buy rating and $75 price target, expecting a long-term tailwind as companies are "migrating to the cloud, driving enterprises to adopt a new security architecture." Analyst Catharine Trebnick praises the attractive entry point and sees Zscaler achieving $1B in annual revenue by 2024. Zscaler shares are down 2.6% pre-market to $59. The company has a Bullish average Sell Side rating.

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Zscaler to acquire Cloudneeti

Cloudneeti is a cloud security posture management company. The transaction is expected to close prior to the completion of Zscaler’s (NASDAQ:ZS) FQ3. Terms of the transaction were not disclosed. Jay Chaudhry, Chairman and CEO of ZS: “Cloudneeti augments Zscaler’s data protection capabilities and will dramatically improve organizations’ cloud security by discovering and eliminating some of the most common causes of data breaches and compliance violations,”. Press Release

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Zscaler upgraded on demand trends

Zscaler (NASDAQ:ZS) gains a bull at Rosenblatt, which leaves the sidelines due to the "urgent need for cloud-based security." The firm says ZS is perhaps the best-positioned software company to benefit from the current secular trend that's driven by the remote work shift. Price target is raised from $58 to $75, a 20% upside. Zscaler has a Bullish average Sell Side rating.

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Wedbush praises Zscaler's deal resilience

Wedbush analyst Daniel Ives cites checks showing that Zscaler's (NASDAQ:ZS) "deal flow is holding up well/stronger than expected" during the coronavirus pandemic. Ives notes that the company's products play "right into the Remote access/work from home cloud theme." Wedbush maintains an Outperform rating and $80 target on Zscaler. The company has a Bullish average Sell Side rating. ZS shares are up 2.4% to $69.66.

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Zscaler downgraded on 'lofty expectations'

Zscaler's (NASDAQ:ZS) balanced risk profile leads to a Credit Suisse downgrade from Outperform to Neutral. The firm notes the "lofty expectations implied by the stock’s outperformance" with shares up nearly 70% from a March low. Credit Suisse expects ZS to post "robust" growth for many years, but the near-term macro uncertainties could put IT projects on hold and raise sales execution risks. The firm raises its ZS price target from $70 to $75, a 12% upside. Zscaler shares are down 1.9% to $65.62. The company has a Bullish average Sell Side rating.

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Zscaler downgraded after rally

Citing the current valuation, SunTrust downgrades Zscaler (NASDAQ:ZS) from Buy to Hold with a $73 target. Analyst Joel Fishbein notes that shares are up nearly 70% from last month's low, and the valuation reflects "a near-best-case-scenario." Fishbein says the coronavirus pandemic could be delaying larger deals, but he continues to like Zscaler's long-term market position. Zscaler has a Bullish average Sell Side rating.

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Needham picks winners as IT Security spending shifts

Gartner's updated view on security (and broader) IT spending arrives at conclusions that will make sense to most investors: Spending will take a hit amid the COVID-19 pandemic. But Security is maybe the most resilient sector in IT, and along the way that means a shift to cloud will accelerate, Needham's Alex Henderson and team note. Digging in, Gartner sees certain areas within Security as benefiting - particularly Identity and Endpoint - while the cloud shift means Firewalls and branch products will be hurt the most going forward. Overall, the firm sees a number of companies benefiting from what Gartner sees, both in the short term and the long term, including CrowdStrike (NASDAQ:CRWD); Okta (NASDAQ:OKTA); Ping Identity (NYSE:PING); Cloudflare (NYSE:NET); Zscaler (NASDAQ:ZS); and Akamai (NASDAQ:AKAM). Companies facing heavier pressure both short- and long-term are SailPoint (NYSE:SAIL), and Fortinet (NASDAQ:FTNT) and Palo Alto Networks (NYSE:PANW), despite those latter two companies posting strong earnings reports with healthy guidance. Gartner notes a cloud shift comes alongside the convergence of Identity Management, Identity Governance and Privilege Access Management, moves Needham believes favors companies like Okta and poses a challenge to CyberArk (NASDAQ:CYBR) and SailPoint. A near-term shift in spending away from Vulnerability Management shows up in cautious commentary out of Qualys (NASDAQ:QLYS) and Rapid7 (NASDAQ:RPD), though they too should see long-term positives (Qualys, and CrowdStrike, well positioned with cloud platforms, while Rapid7 should keep gaining share in middle market and low-end of Enterprise). Zscaler is in best position to deliver on the Secure Web Gateway, an area Gartner sees as a short-term beneficiary and a long-term winner amid the cloud shift. Meanwhile, the COVID-19 pandemic is accelerating the transition to cloud and particularly from on-premise to delivered, an area Needham sees as with particular longer-term strength amid an "inexorable" shift. That's a positive for CloudFlare, Akamai and Radware (NASDAQ:RDWR), with a mixed-bag result for F5 (NASDAQ:FFIV), which still has a "foot in both camps." In price targets, the firm has a target of $112 on Akamai (12% upside); $92 on CrowdStrike (16% upside); $170 on F5 (22% upside); $32 on Cloudflare (14% upside); $118 on Qualys (which closed at $117.32 today); $72 on Rapid7 (57% upside); $85 on Varonis Systems (VRNS; 2.4% upside); and $89 on Zscaler (16% upside).

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Zscaler Q3 2020 Earnings Preview

Zscaler (NASDAQ:ZS) is scheduled to announce Q3 earnings results on Thursday, May 28th, after market close. The consensus EPS Estimate is $0.02 (-60.0% Y/Y) and the consensus Revenue Estimate is $106.18M (+34.2% Y/Y). Over the last 2 years, ZS has beaten EPS estimates 100% of the time and has beaten revenue estimates 100% of the time. Over the last 3 months, EPS estimates have seen 1 upward revision and 1 downward. Revenue estimates have seen 1 upward revision and 2 downward.

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Zscaler surges to record high on Q3 beat, analyst praise

Zscaler (ZS +26%) shares zip to all-time highs following the company's strong Q3 earnings beat with billings growth accelerating to 55% from 30% in Q2. Dougherty analyst Catharine Trebnick, who rates the stock as a Buy and raises its price target to $95 from $85, sees the Q3 results as evidence the company is "well positioned to support businesses impacted by the pandemic," according to Bloomberg. "The increased focus on [Zscaler Private Access], drove traffic growth of ~10x since the beginning of February forcing the company to expand the use of public clouds," Trebnick writes. Rosenblatt analyst Yun Kim raises his price target to a Street-high $115 from $75, calling Zscaler "perhaps the best-positioned security software company to benefit from the current secular trend towards cloud-based security platform." Zscaler is "the best pure play in the cloud security arena, which we believe is still in the very early innings of taking off with overall hybrid cloud workloads poised to meaningfully accelerate over the coming years," Wedbush's Dan Ives writes.

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Zscaler adds to gain after scoring DoD job

Zscaler (NASDAQ:ZS) says it landed a cloud management project from the DoD's Defense Innovation Unit. The company will provide zero trust access to protect DIU users and cloud services from cyberthreats no matter where personnel are working or what devices they are using. ZS +19.59% premarket to $90.65. Previously: Zscaler soars after strong earnings (May 29) Source: Press Release

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Zscaler soars after strong earnings

Wedbush keeps an Outperform rating on Zscaler (NASDAQ:ZS) after the company blew away expectations with its Q1 report as billings growth accelerated to 55%. "The acceleration of demand in the field is being accelerated by the COVID-19 pandemic backdrop with more enterprises shifting to a remote workforce for the foreseeable future and CIOs focused on fast tracking a digital transformation with ZS front and center," notes analyst Dan Ives on the quarter. "In our opinion, ZS is the best pure play in the cloud security arena, which we believe is still in the very early innings of taking off with overall hybrid cloud workloads poised to meaningfully accelerate over the coming years and in this climate could see some strategic deals moved forward as the shift to cloud outside the firewall is catalyzing sales cycles and will put clear momentum in this story over the coming quarters," he adds. Wedbush increases its price target on Zscaler to $100 from $80 to give shares more room to run. Shares of Zscaler are up 17.43% premarket to $89.01 and look like they may break through the $90 threshold.

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Zscaler EPS beats by $0.05, beats on revenue

Zscaler (NASDAQ:ZS): Q3 Non-GAAP EPS of $0.07 beats by $0.05; GAAP EPS of -$0.15 beats by $0.08. Revenue of $110.52M (+39.7% Y/Y) beats by $4.34M. Press Release

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Cloud stalwarts are winners in long-term work-from-home - Wedbush

A heavy work-from-home workforce seems here to stay until a COVID-19 vaccine is found, despite easing lockdowns globally, Wedbush says - and that means at least 12-18 months of a "new normal." And though front-end names have drawn attention so far (including Zoom (NASDAQ:ZM), DocuSign (NASDAQ:DOCU), Citrix (NASDAQ:CTXS) and Slack (NYSE:WORK)), "it's the back-end public/hybrid cloud stalwarts such as Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT) and Google (GOOG, GOOGL) ultimately facilitating virtual office and communications globally," the firm writes. And while those customers who already migrated to the cloud are seeing relatively smooth transitions, others were caught "flat footed" and reports from the field suggest cloud migrations and infrastructure projects are being greenlighted "well ahead of expectations." The firm now says its longstanding projection that cloud workload share would increase from 33% to 55% by 2022 now looks conservative, and those targets could be reached a year early. The trend is a tailwind for cloud-exposed cybersecurity names as well, the firm says. Recent checks suggest faster deployment and deal flow for players including Fortinet (NASDAQ:FTNT), Varonis (NASDAQ:VRNS), Tenable (NASDAQ:TENB), Qualys (NASDAQ:QLYS), Zscaler (NASDAQ:ZS), SailPoint (NYSE:SAIL), and CyberArk (NASDAQ:CYBR). One example: the "LeBron-like prints" from Zscaler and CrowdStrike (NASDAQ:CRWD), which speak to "just the tip of this cloud trend catalyzing deal flow for cybersecurity players in this environment as CISOs rip off the band-aid and prepare for the new normal/majority remote workforces looking forward." Among higher-upside targets in its Outperform-rated names: SailPoint, where a $28 target implies 20.5% upside; Microsoft ($220 target implies 19% upside); Fortinet ($170 target implies 19% upside); Tenable ($35 target implies 15% upside); and CyberArk ($120 target implies 13% upside).

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Cisco downgraded on demand headwind

Seeing the potential for lower demand due to the remote work shift, Baird downgrades Cisco (NASDAQ:CSCO) from Outperform to Neutral with a $48 price target. Analyst Jonathan Ruykhaver: "The current environment could lead to a deemphasis on the corporate network, which we expect would be a headwind." The analyst calls Zscaler (NASDAQ:ZS) and Cloudflare (NYSE:NET) better-positioned to benefit from the work-from-home trend. Ruykhaver sees Cisco's risks as more balanced due to "secular and macro concerns." Cisco shares are down 1.2% pre-market to $47.46. The company has a Bullish average Wall St. Analysts rating and a Neutral Quant rating.

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Zscaler gains as former bear sees pandemic tailwind

Citing benefits from the work from home trend, Morgan Stanley upgrades Zscaler (NASDAQ:ZS) from Underweight to Equal-Weight with a $104 price target. Analyst Keith Weiss says public cloud and remote computing adoption will likely accelerate coming out of the pandemic, which limits "the effectiveness of traditional perimeter-based network security." Weiss writes that the factors will "likely result in a faster shift towards 'Zero Trust Architectures' -- a modern security approach treating all network traffic as untrusted regardless of origin/destination." Morgan Stanley's previous bearish stance on Zscaler underestimated its remote work tailwind and the speed of its sales improvement. Zscaler shares are up 6.8% to $113.35. The company has a Bullish Wall St. Analysts rating.

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Zscaler lifted to Street-high price target on demand trends

Following the non-deal roadshow, Needham lifts Zscaler's (NASDAQ:ZS) price target from $110 to $130, citing the "continued strong momentum." The firm "came away convinced the outlook is still strengthening." Zscaler's strong demand and stronger than expected sales execution suggest a "robust" quarter, writes Needham. Needham maintains a Strong Buy rating on Zscaler, which has a Bullish average Wall St. Analysts rating. Zscaler shares are up 2.6% to $111.36.

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Zscaler proposes offering of $1B convertible senior notes

Zscaler (NASDAQ:ZS) intends to offer $1B aggregate principal amount of its convertible senior notes due 2025. It also intends to grant the initial purchasers of the notes a 13-day option to purchase up to an additional $150M aggregate principal amount of notes. Zscaler intends to use a portion of the net proceeds to pay the cost of the capped call transactions and the rest for general corporate purposes. Terms will be determined at the time of pricing of the offering.

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Zscaler prices $1B offering 0.125% convertible senior notes due 2025

Zscaler (NASDAQ:ZS) has priced $1B of 0.125% convertible senior unsecured notes due July 1, 2025 in a private placement, with an initial purchasers' option to purchase an additional $150M of notes. Closing date is June 25. Interest will be payable semiannually in arrears on January 1 and July 1 of each year, beginning on January 1, 2021. Net proceeds will be $983M (or $1,130.5M if the initial purchasers exercise their option), and $126.3M of the net proceeds will be used to pay the cost of the capped call transactions and the remainder for general corporate purposes. ZS +1.4% premarket.

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Zscaler earns bullish start on cloud 'mega-trends'

Seeing accelerating trends in the cloud security market, RBC Capital starts Zscaler (NASDAQ:ZS) at Outperform and a $130 price target. Analyst Matthew Hedberg: "While mega-trends such as cloud adoption, digital transformation and zero-trust security seem well-established, we believe COVID could accelerate these trends within five years." Hedberg sees ZS as "well positioned to disrupt $20B of legacy security spend." ZS shares are up 2.5% pre-market to $112.96. The company has a Bullish average Wall St. Analysts rating.

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Zscaler price target raised on pandemic strength

Citing recent field checks for the July quarter, Wedbush raises its Zscaler (NASDAQ:ZS) price target from $100 to $150, a 25% upside. Analyst Daniel Ives says the checks show Zscaler holding up "extremely well" during the pandemic since the "company’s DNA plays right into the Remote access / work from home cloud theme serving a major need given the lockdowns globally." ZS is seeing increased deal and pipeline generation, and the large deal flow is "holding up as well as any enterprise security vendor" that Wedbush covers. Wedbush maintains an Outperform rating on Zscaler. The company has a Bullish average Wall St. Analysts rating. Zscaler shares are down 2.6% to $116.76 during a broader tech selloff.

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FireEye +12.6% on raised FY revenue view

FireEye (NASDAQ:FEYE) pops 12.6% after hours following Q2 beats and a lifted FY revenue view. The company hit an all-time ARR record of $598M, up 8% Y/Y. Cloud subscription and managed services ARR rose 27% to $302M, passing product and related subscription and support ARR for the first time. For Q3, the company sees revenue of $225-229M (consensus: $220.3M), EPS of $0.06 to $0.08 (consensus: $0.02), 70-71% gross margin, and 7.5-8.5% operating margin. For the year, FEYE now sees revenue of $905-925M (was: $880-900M; consensus: $889.8M), EPS of $0.22-0.26 (consensus: $0.05), gross margin of 70.5-71.5% (consensus: 69.6%), and operating margin of 6.5-7.5%. Press release. Cybersecurity stocks that could move on FEYE's signal of H2 strength: Proofpoint (NASDAQ:PFPT), Crowdstrike (NASDAQ:CRWD), Palo Alto (NYSE:PANW), and Zscaler (NASDAQ:ZS).

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PG&E, Peloton, Zscaler to be added to MSCI World Index

MSCI (NYSE:MSCI) will add 18 securities to its MSCI ACWI Index, its flagship global equity index, and delete 14 securities as part of its quarterly index review for equity indexes. The MSCI World Index will have six added and four deleted; the three largest additions to the MSCI World Index, measured by full company market capitalization, will be PG&E (NYSE:PCG), Peloton Interactive A (NASDAQ:PTON), and Zscaler (NASDAQ:ZS). HollyFrontier (HFC) will be deleted from the MSCI USA Index. The changes will be implemented as of the close on Aug. 31, 2020. There will be seven securities added to and three deleted from the MSCI US Large Cap 300 Index, with the three largest additions being Docusign (NASDAQ:DOCU), Twilio (NYSE:TWLO), and Snap (NYSE:SNAP). The US Mid Cap 450 Index will have 10 securities added and 10 deleted; the three largest additions will be KeyCorp (NYSE:KEY), Horizon Therapeutics (NASDAQ:HZNP) and Quidel (NASDAQ:QDEL). For the MSCI US Small Cap 1750 Index, three securities will be added and seven will be deleted; the three largest additions are H&R Block (NYSE:HRB), TripAdvisor (NASDAQ:TRIP), and Nordstrom (NYSE:JWN).

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Zscaler gets bullish start on pandemic, secular trend tailwinds

Noting the company's pandemic tailwind, Loop Capital analyst Yun Kim starts Zscaler (NASDAQ:ZS) with a Buy rating and $160 price target. Kim calls ZS one of the "very few" software names benefiting from the work from home trend's demand for cloud-based security architecture. The analyst thinks the Street is looking for a new security paradigm, focusing on multi-tenant cloud platforms rather than the traditional network perimeter approach. ZS is "he single best pure-play vendor" to benefit from the shift, says Kim. Zscaler shares are up 0.5% to $137.07. Upcoming catalyst: Zscaler will report fiscal Q4 earnings on September 9. Consensus estimates expect $118.62M in revenue and $0.03 EPS. ZS guided $117-119M in revenue and EPS of $0.02-0.03.

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Cloud stocks revving up as Fastly breaks out to 11% gain

Work-from-home tech and cloud computing stocks are rising, benefiting from money flowing into familiar lockdown winners with a lack of leadership in other sectors. Fastly (FSLY, +11.5%) is leading cloud names. The stock plunged earlier this month after CEO Joshua Bixby identified TikTok as the company's largest single customer, accounting for 12% of H1 revenue. But there are now two potential suitors for TikTok, with Microsoft joined by Oracle, who got a nod from President Trump as a good fit. The edge cloud platform company still has more than 20% to go until shares are back where they were before the TikTok selloff, around $109. Edge computing also got a nod from Nvidia’s conference call, where CFO Colette Kress highlighted the company’s new EGX Edge AI platform. While new entrants mean increased competition, they also illustrate the potential for the space. Fastly said in its latest 10Q that such increased competitions could lead to takeovers and strategic partnerships. Other cloud stocks on the move include cloud security company Zscaler (ZS, +6.4%) and Datadog (DDOG, +4.5%). The First Trust Cloud Computing ETF (NASDAQ:SKYY) is up 1.3%. The WisdomTree Cloud Computing ETF (NASDAQ:WCLD) is up 2.9%. Among work-from-home tech names, Zoom Video (ZM, +5.9%) is jumping, joined by Slack (WORK, +5%) and DocuSign (DOCU, +3%). Brazilian-U.S. investment fund 3G Capital revealed last week it started new stakes in Fastly and Zoom.

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Earnings wave sinks software stocks amid broader tech selloff

Software stocks are slumping after a full slate of earnings reports that included Zuora, CrowdStrike, PagerDuty, Smartsheet, MongoDB , and Cloudera. CrowdStrike shares fell despite a beat-and-raise on valuation concerns, which BofA dismissed. Zuora posted a disappointing Q3 outlook, while PagerDuty's billings fell short of estimates and Smartsheet's loss forecast was wider than expected. Cloudera's results beat estimates for the quarter and guidance, and MongoDB beat and raised its FY outlook. But both companies were still caught in the broader tech selloff. Top decliners include Zscaler (ZS -10.0%), Box (BOX -7.3%), Medallia (MDLA -14.2%), BigCommerce (BIGC -11.5%), and Fastly (FSLY -9.6%). DocuSign (DOCU -12.9%) is on deck to report earnings after today's bell. Previously: Tech selling accelerates, driving Nasdaq to more than 3% decline (Sep. 03 2020) The iShares Expanded Tech-Software Sector ETF (BATS:IGV) is still ahead of the tech sector (NYSEARCA:XLK) in the six-month view, and both have trounced the S&P 500:

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Zscaler Q4 2020 Earnings Preview

Zscaler (NASDAQ:ZS) is scheduled to announce Q4 earnings results on Wednesday, September 9th, after market close. The consensus EPS Estimate is $0.03 (-57.1% Y/Y) and the consensus Revenue Estimate is $118.67M (+37.8% Y/Y). Over the last 2 years, ZS has beaten EPS estimates 100% of the time and has beaten revenue estimates 100% of the time. Over the last 3 months, EPS estimates have seen 3 upward revisions and 0 downward. Revenue estimates have seen 3 upward revisions and 0 downward.

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Zscaler price targets raised after 'masterpiece' earnings

Wedbush analyst Daniel Ives raises Zscaler's (NASDAQ:ZS) price target from $150 to $160 and maintains an Outperform rating after "another masterpiece quarter." The analyst praises Zscaler's 55% billings growth, which topped consensus and spoke to "underlying cloud deal momentum." Ives: " In our opinion, ZS is the best pure play in the cloud security arena, which we believe is still in the very early innings of taking off with overall hybrid cloud workloads poised to meaningfully accelerate over the coming years and in this climate could see some strategic deals moved forward as the shift to cloud outside the firewall is catalyzing a handful of key sales cycles." BofA (Buy) raises Zscaler from $150 to $155. The firm sees a potential "soft spot" in the FY21 billings growth estimate of 30% Y/Y versus the 41% in FY20. But BofA thinks the guidance is likely conservative. BofA's target is based on roughly 31x CY21E EV/Sales, a premum on high-growth security peers (7-10x) and high-growth security peers (10-25x) but fairly in=line with SaaS security peers (20-30x). Zscaler shares are up 0.8% pre-market to $135.30. . Previously: Zscaler shares fall despite FQ4 beats, strong outlook (Sep. 09 2020) Deeper dive: Zscaler's Q4 earnings call transcript.

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Zscaler shares fall despite FQ4 beats, strong outlook

Zscaler (NASDAQ:ZS) dips 2% AH despite posting fiscal Q4 beats with 46% Y/Y revenue growth. Shares are pulling back from a 186% YTD rally. Calculated billings were up 55% Y/Y to $194.9M, topping the $175.2M estimate. The growth rate matched the rate in Q1. Cash from operations totaled $31.6M with FCF of $10.9M. ZS ended the quarter with $1.37B in cash and equivalents. Deferred revenue increased 47% to $369.8M. For Q1, ZS expects $131-133M in revenue (consensus: $126.58M) and $0.05-0.06 EPS (consensus: $ 0.04). The FY21 forecast has $580-590M in revenue (consensus: $557.02M), calculated billings of $710-720M and $0.28-0.30 EPS (consensus: $0.29). Press release Previously: Zscaler EPS beats by $0.02, beats on revenue (Sep. 09 2020)

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Zscaler EPS beats by $0.02, beats on revenue

Zscaler (NASDAQ:ZS): FQ4 Non-GAAP EPS of $0.05 beats by $0.02; GAAP EPS of -$0.38 misses by $0.21. Revenue of $125.89M (+46.2% Y/Y) beats by $7.22M. Billings grew 55% Y/Y to $194.9M, higher than estimate of $175.2M. Press Release

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Zscaler price target raised on sustainable pandemic tailwind

Valuation concerns prompted Berenberg to hit the Zscaler (NASDAQ:ZS) sidelines in June, but the firm is now raising the price target from $102 to $142. Analyst Joshua Tilton says the firm "underappreciated the sustainability" of the pandemic-related remote work demand Following the FQ4 results, Tilton sees "sustainable accelerated product drivers." Zscaler recently reported upside FQ4 results with 55% Y/Y calculated billings growth and strong Q1 and full-year forecasts. Wedbush analyst Daniel Ives called the FQ4 print "another masterpiece quarter." Zscaler shares are up 0.7% pre-market to $133.51.

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Zscaler partners with VMware to simplify security and networking infrastructure

Zscaler (ZS +2.0%) has expanded strategic partnership with VMware (VMW +2.7%) to help large organizations simplify the adoption of a complete Secure Access Service Edge (SASE) architecture and more effectively implement Zero Trust security. Jay Chaudhry, Chairman and CEO of Zscaler said, “By integrating our purpose-built cloud security with VMware’s cloud-native SD-WAN solution, our customers can focus on outcomes instead of managing infrastructure and point products to secure their workforce.” Press release

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Zscaler best 'pure play' in cloud security, says Wedbush bull's price target boost

Calling the company the "sweet spot" of the cyber security shift, Wedbush raises its Zscaler (NASDAQ:ZS) price target from $160 to $175 and maintains an Outperform rating. Analyst Daniel Ives says field checks for the October quarter continue to suggest that "Zscaler’s deal flow is holding up extremely well in this environment." Ives: "In our opinion, ZS is the best pure play in the cloud security arena, which we believe is still in the very early innings of taking off with overall hybrid cloud workloads poised to meaningfully accelerate over the coming years and in this climate could see some strategic deals moved forward as the shift to cloud outside the firewall is catalyzing a handful of key sales cycles." Zscaler shares are trading essentially flat at $146.80. Zscaler has a Bullish average Wall Street analysts rating and Neutral rating from Seeking Alpha contributors.

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Zscaler the 'first mover' in $20B cloud network security market, JPMorgan says

JPMorgan views Zscaler (NASDAQ:ZS) as the "first mover disrupting force" behind the network security in the pandemic's cloud migration acceleration. Analyst Sterling Auty thinks Zscaler can take a "significant share" of a $20B+ TAM. Auty: "Zscaler is one of a small group of software companies that are still growing over 40% per year while generating north of $400 million of revenue and are profitable. In fact, Zscaler is in the rule of 50 rather than rule of 40 segment, demonstrating that it is not just spending to generate the growth." The Rule of 40 is a common metric in analyzing software companies that says the combined growth rate and profit margin should exceed 40%. JPMorgan starts Zscaler at an Overweight rating and $190 price target. The firm notes that ZS is currently trading at 31.4x CY21E sales, in-line with high-growth security companies like CrowdStrike and Okta and a discount to the broader high-growth SaaS bucket, which is trading at 34.4x. Zscaler shares are up 3.3% to $151.89. Zscaler has a Bullish average Wall Street analysts rating with a $150.30 price target.

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Rising coronavirus lockdowns, FireEye's $400M strategic investment drive software stocks higher

Software stocks are trending higher today with some of the notable names getting a pandemic-related tailwind from the tightening restrictions in the U.S. as coronavirus cases spike. The sector is also riding yesterday's news that FireEye received a $400M strategic investment led by Blackstone. Top software movers include major WFH players Slack (WORK +6.3%), Fastly (FSLY +4.4%), and Zoom Video (ZM +6.9%), recently public names Sumo Logic (SUMO +6.1%) and Unity Software (U +6.0%), and Atlassian (TEAM +4.4%), ZoomInfo (ZI +3.4%), and Zscaler (ZS +4.1%). Previously: FireEye stock still climbing despite downgrade as other analysts praise acquisition, $400M strategic investment (Nov. 20 2020) Shares of Zoom and Fastly have exploded during the pandemic and recovered from the WFH pullback related to the recent positive coronavirus vaccine news. Here's a look at how the stocks performed compared to the tech sector (NYSEARCA:XLK) and S&P 500 over the past year:

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Zscaler upgraded at Credit Suisse on 'debunked' downward thesis, durable pandemic tailwind

Seeing the pandemic "acting as a more durable catalyst for cloud security adoption," Credit Suisse upgrades Zscaler (NASDAQ:ZS) from Neutral to Outperform and raises the price target from $140 to $160. Analyst Brad Zelnick says the firm's prior "downgrade thesis has largely been debunked." Zelnick: "Our thinking in April was predicated on a) transformational projects being put on hold; b) elevated execution risk given the magnitude and pace of GTM changes against a difficult macro; and c) high embedded expectations." The analyst says some transformational projects have been delayed or downsized, but Zscaler has benefited from the pandemic's disruption and should continue to do so as more companies lean into cloud transformaiton. Zelnick calls ZS the "flagbearer of of cloud security with a differentiated architecture." Zscaler shares are up 2.3% pre-market to $144.39. ZS has a bullish average Wall Street analyst rating with a $151.17 price target.