Needham analyst Mike Cikos has maintained their bullish stance on ZS stock, giving a Buy rating today.
Mike Cikos has given his Buy rating due to a combination of factors that highlight Zscaler’s strong financial performance and strategic initiatives. The company has shown robust growth in Billings, exceeding expectations in the first half of FY25 with impressive unscheduled Billings growth rates of over 20% in the first quarter and 25% in the second quarter. This consistent performance suggests a solid execution capability, bolstered by a more stable sales force and improved sales productivity.
Furthermore, Zscaler’s strategic initiatives are gaining traction, as evidenced by increased engagement with global system integrators and a rise in the number of clients contributing significantly to the annual recurring revenue. The fact that a majority of new Branch customers are new clients indicates successful market penetration strategies. These factors collectively support the projection that Zscaler is on track to achieve over $3 billion in annual recurring revenue by the end of the year, reinforcing the Buy recommendation.
Cikos covers the Technology sector, focusing on stocks such as Dynatrace, Tenable Holdings, and Cloudflare. According to TipRanks, Cikos has an average return of 10.6% and a 51.15% success rate on recommended stocks.
In another report released today, Barclays also maintained a Buy rating on the stock with a $250.00 price target.
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