Analysts are Revising Prices Targets of These 5 Stocks Following Earnings

4. Zscaler, Inc. (NASDAQ:ZS)

Number of Hedge Fund Holders: 51

Zscaler, Inc. (NASDAQ:ZS) recently delivered solid profit and sales for its fiscal first quarter. Yet, Baird lowered its price target for the cloud security stock from $220 per share to $180 per share on December 5, citing a lesser surge in quarterly billings versus past trends.

For its fiscal Q1, Zscaler, Inc. (NASDAQ:ZS) earned 29 cents per share on an adjusted basis, significantly higher than 14 cents per share in the year-ago period and above the consensus of 26 cents. Revenue came in at $355.5 million, up 54 percent on a year-over-year basis and above expectations of $343.9 million. Calculated billings also jumped 37 percent versus last year to $340.1 million.

Separately, investment management firm Artisan Partners also discussed Zscaler, Inc. (NASDAQ:ZS) in its third-quarter 2022 investor letter, stating:

“Our notable adds in the quarter included Zscaler, Inc. (NASDAQ:ZS) , Etsy and BioNTech. Zscaler provides cloud-based Internet security solutions. The company recently delivered 61% revenue growth and expects to grow nearly 40% in 2023 (ahead of expectations). Despite solid fundamental momentum, shares have underperformed this year as investors have grown concerned about slowing demand for enterprise software as the broader global economy slows. We believe the dual trends of rising security vulnerability and increased enterprise digitization will lead to sustained demand, even in a recession. Cybersecurity remains a top concern for businesses and governments alike as cyberattacks can have devastating financial and reputational consequences. From 2018 to 2020, losses from cybercrimes grew 67% to $1 trillion, and some estimate it could reach $10 trillion by 2025. Meanwhile, managing the security needs of legacy on-premise applications, a growing number of cloud-based applications (Office 365, Salesforce, etc.) and a more remote workforce (versus pre-pandemic) make operating IT infrastructures increasingly complex. Zscaler’s scalable, cloud-based security platform is a more secure and efficient way to connect users and applications, which eliminates the need for several layers of security (firewalls, VPNs, etc.) developed and built over the last couple of decades. For these reasons and with shares trading at an attractive discount to our PMV estimate, we added to our position.”