April 14, 2024

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ZS Stock: Zscaler Earnings Top Views But Billing Size Overcomes Disappointment

ZS Stock: Zscaler Earnings Top Views But Billing Size Overcomes Disappointment

Zscaler (ZS) reported the financial second-quarter earnings and revenue that topped Wall Street targets. But Billings’ growth was only hurt by analyst estimates, and ZS stock fell on the news Friday.


The cybersecurity company released its earnings report after the market closed on Thursday. Zscaler announced a restructuring and staff reduction with the aim of streamlining operations.

For the quarter ended January 31, Zscaler’s earnings were 37 cents per share on an adjusted basis, up 184% from the prior year. The San Jose, California-based company said revenue rose 52% to $387.6 million.

Analysts had expected Zscaler earnings of 29 cents per share on sales of $364.7 million. Billings also rose 34% to $493.8 million, compared to estimates of $491.5 million.

“On paper, Zscaler had a good quarter, but billings growth of 34% fell short of investor expectations as delayed and slower deals again impacted growth in the quarter,” UBS analyst Roger Boyd said in a note to clients.

ZS Stock: Rising Competition in Palo Alto?

ZS stock is down 12.7% to close at 117 in early stock market trading today.

For the full 2023 fiscal year, Zscaler projected bills of $1.94 billion in the middle of its forecast, slightly above estimates of $1.93 billion.

“Although clients continue to apply high levels of scrutiny to deals, which lengthens sales cycles, ZS Notes deals are not going away,” TD Coin analyst Shaul Eyal said in a note.

Some analysts point to increased competition Zscaler faces from Palo Alto Networks (Banu).

Zscaler provides cloud-based cybersecurity services across 150 data centers around the world.

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Heading to Zscaler’s earnings report, ZS stock has a relative strength rating of 18 out of the best possible 99, according to IBD stock check.

Follow Reinhardt Krause on Twitter @employee For updates on 5G wireless networks, artificial intelligence, cybersecurity, and cloud computing.

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