Brian Essex, an analyst from J.P. Morgan, maintained the Buy rating on Zscaler (ZS – Research Report). The associated price target was raised to $250.00.
Brian Essex’s rating is based on Zscaler’s strong performance in the second quarter, which exceeded expectations across several key financial metrics such as billings, revenue, profitability, and free cash flow. The company’s ability to surpass these benchmarks allowed it to raise its guidance for the fiscal year, driven by improved sales productivity and robust demand for its Zero Trust Everywhere platform. This demand is further supported by a shift in enterprise network architecture, as companies move away from legacy systems, and a growing need for data protection across AI applications.
Moreover, Zscaler has demonstrated significant momentum with large customers, evidenced by a 25% year-over-year growth in customers with over $1 million in spending. The company’s strategic focus on AI integration has also resulted in increased pricing for bundled products. Despite the upward revision in guidance, Essex expresses confidence in Zscaler’s ability to meet its targets due to its strong sales execution and pipeline momentum. This confidence, coupled with the company’s market positioning and financial performance, underpins the Buy rating.
In another report released today, Bernstein also maintained a Buy rating on the stock with a $244.00 price target.