Zscaler (ZS) soared Friday after the company reported fiscal fourth-quarter earnings, revenue and billings that handily beat Wall Street targets. And the company’s fiscal 2023 outlook for Zscaler stock came in above views.
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ZS stock catapulted 21.9% to close at 188 on the stock market today. The cybersecurity firm reported July quarter earnings after the market close on Thursday.
“Zscaler was the last (cybersecurity) company to report results this earnings cycle, and clearly stood out as having the best results and the strongest guidance,” said Wells Fargo analyst Andrew Nowinski in a report.
He added: “The strong performance was largely a function of the fact that the company was purpose-built for exactly this type of macro environment, where budgets are tightening and companies are looking for ways to lower costs. Zscaler can eliminate many point products and simplify the cyber infrastructure, all while lowering costs for the customer.”
ZS Stock: Earnings, Revenue Beat Views
Prior to the Zscaler earnings release, the cybersecurity stock had retreated 54% in 2022.
The San Jose, Calif-based firm said earnings were 25 cents a 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 expected Zscaler earnings of 21 cents per share on sales of $305.4 million. Also, billings rose 57% to $520.4 million, compared with estimates for $467.2 million.
For fiscal 2023, which starts with the October quarter, Zscaler said it expects earnings of $1.17 a share at the midpoint of its outlook, ahead of estimates for $1.04 a share.
Zscaler said it expects revenue in a range of $1.49 billion to $1.50 billion. Analysts had predicted revenue of $1.468 billion.
Zscaler Stock: Billings Forecast Tops Estimates
The company forecast fiscal 2023 billings of $1.93 billion, compared with estimates of $1.859 billion.
“Despite the uncertain macroeconomic landscape which continues to evolve, we continue to see favorable demand for our Zero Trust Exchange platform because it makes businesses more secure, simplifies IT, and reduces cost,” Chief Executive Jay Chaudhry said in the company’s earnings release.
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Heading into the Zscaler earnings report, the company owned a Relative Strength Rating of 17 out of a best-possible 99, according to IBD Stock Checkup.
In addition, Zscaler provides cloud-based cybersecurity services via 150 data centers worldwide
Zscaler’s web security gateways inspect customers’ data traffic for malware. The Zscaler Private Access, or ZPA cloud service, replaces virtual private networks, or VPNs, to support remote work.
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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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