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Zscaler (ZS) to Report Q1 Earnings: What's in the Cards?
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Zscaler (ZS - Free Report) is set to report first-quarter fiscal 2021 results on Dec 2.
For the quarter, the company projects total revenues between $131 million and $133 million. Moreover, non-GAAP earnings are expected between 5 cents and 6 cents per share.
The Zacks Consensus Estimate for revenues is pegged at $132.4 million, indicating an increase of 41.5% from the year-ago quarter’s reported figure. The consensus mark for earnings has remained unchanged at 6 cents per share over the past 30 days.
Notably, the company’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average being 179.2%.
Zscaler’s quarterly results are expected to reflect benefits from continued solid demand for its security and networking products, given the healthy environment of the global security market.
Also, a huge global workforce is working remotely in an effort to contain the spread of coronavirus. However, an increasing number of people logging into employers' networks has been triggering a greater need for security. This trend might have spurred demand for Zscaler’s products in the fiscal first quarter.
Additionally, strong adoption of the company’s Zero Trust Exchange platform owing to the ongoing digital transformation across enterprises is expected to have been a key catalyst.
Moreover, the addition of new capabilities to Zscaler Zero Trust Exchange, such as Cloud Access Security Broker (CASB), Cloud Browser Isolation, and Zscaler Cloud Security Posture Management (CSPM) for SaaS applications, is likely to have driven the expansion of the company’s product portfolio and aided customer acquisition.
Markedly, in the last reported quarter, the company had more than 4,500 customers, including above 150 customers from Fortune 500 companies and more than 450 of the global 2,000 companies. Also, Zscaler’s net dollar retention rate rose to 120% compared with 119% recorded in the previous quarter.
Additionally, the acquisition of Edgewise and Cloudneeti is likely to have added to the company’s data-protection capabilities. Moreover, a significant contribution from Zscaler Internet Access (ZIA) and Zscaler Private Access (ZPA) businesses is expected to have aided top-line growth.
Further, the company’s partnerships with VMware and Silver Peak are expected to have facilitated accelerated deployment of its Software-Defined Wide Area Network (SD-WAN) solutions, thereby driving revenues in the quarter under review.
Moreover, Zscaler’s quarterly results are likely to reflect robust growth in subscription revenues. An increasing number of net new subscription customers might have been a key tailwind as well.
Nonetheless, increased investments to enhance sales and marketing capabilities, and higher research and development expenses are likely to have weighed on the company’s bottom-line results.
What Our Model Says
Our proven model does not predict an earnings beat for Zscaler this earnings season. The combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.
Zscaler currently has an Earnings ESP of +18.28% and a Zacks Rank of 4 (Sell).
Stocks With Favorable Combinations
Here are some companies, which, per our model, have the right combination of elements to post an earnings beat in their upcoming releases:
The Toronto-Dominion Bank (TD - Free Report) has an Earnings ESP of +3.63% and a Zacks Rank of 2, at present.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Shutterstock
Zscaler (ZS) to Report Q1 Earnings: What's in the Cards?
Zscaler (ZS - Free Report) is set to report first-quarter fiscal 2021 results on Dec 2.
For the quarter, the company projects total revenues between $131 million and $133 million. Moreover, non-GAAP earnings are expected between 5 cents and 6 cents per share.
The Zacks Consensus Estimate for revenues is pegged at $132.4 million, indicating an increase of 41.5% from the year-ago quarter’s reported figure. The consensus mark for earnings has remained unchanged at 6 cents per share over the past 30 days.
Notably, the company’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average being 179.2%.
Zscaler, Inc. Price and Consensus
Zscaler, Inc. price-consensus-chart | Zscaler, Inc. Quote
Factors to Consider
Zscaler’s quarterly results are expected to reflect benefits from continued solid demand for its security and networking products, given the healthy environment of the global security market.
Also, a huge global workforce is working remotely in an effort to contain the spread of coronavirus. However, an increasing number of people logging into employers' networks has been triggering a greater need for security. This trend might have spurred demand for Zscaler’s products in the fiscal first quarter.
Additionally, strong adoption of the company’s Zero Trust Exchange platform owing to the ongoing digital transformation across enterprises is expected to have been a key catalyst.
Moreover, the addition of new capabilities to Zscaler Zero Trust Exchange, such as Cloud Access Security Broker (CASB), Cloud Browser Isolation, and Zscaler Cloud Security Posture Management (CSPM) for SaaS applications, is likely to have driven the expansion of the company’s product portfolio and aided customer acquisition.
Markedly, in the last reported quarter, the company had more than 4,500 customers, including above 150 customers from Fortune 500 companies and more than 450 of the global 2,000 companies. Also, Zscaler’s net dollar retention rate rose to 120% compared with 119% recorded in the previous quarter.
Additionally, the acquisition of Edgewise and Cloudneeti is likely to have added to the company’s data-protection capabilities. Moreover, a significant contribution from Zscaler Internet Access (ZIA) and Zscaler Private Access (ZPA) businesses is expected to have aided top-line growth.
Further, the company’s partnerships with VMware and Silver Peak are expected to have facilitated accelerated deployment of its Software-Defined Wide Area Network (SD-WAN) solutions, thereby driving revenues in the quarter under review.
Moreover, Zscaler’s quarterly results are likely to reflect robust growth in subscription revenues. An increasing number of net new subscription customers might have been a key tailwind as well.
Nonetheless, increased investments to enhance sales and marketing capabilities, and higher research and development expenses are likely to have weighed on the company’s bottom-line results.
What Our Model Says
Our proven model does not predict an earnings beat for Zscaler this earnings season. The combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.
Zscaler currently has an Earnings ESP of +18.28% and a Zacks Rank of 4 (Sell).
Stocks With Favorable Combinations
Here are some companies, which, per our model, have the right combination of elements to post an earnings beat in their upcoming releases:
Signet Jewelers Limited (SIG - Free Report) has an Earnings ESP of +13.95% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Toronto-Dominion Bank (TD - Free Report) has an Earnings ESP of +3.63% and a Zacks Rank of 2, at present.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot stocks we're targeting >>