Run through the news of today, or maybe that of yesterday or even that of last week, and you’ll undoubtedly come across some news about how some company’s security system got hacked and resulted in users being vulnerable. With that in mind, it’s easy to see why cybersecurity is currently the “big deal” in the world today, with more and more companies investing in cybersecurity to protect themselves and their users.
There are lots of cybersecurity stocks on the market today, so if you’re looking to capitalize on the cybersecurity “meta,” you may find it quite challenging to choose the right one. Not to worry, though, because, in this article, we'll explore Zscaler stock –the fastest-growing cybersecurity stock currently available.
Latest Zscaler Inc Development Traders Should Note
Before we go ahead with a thorough evaluation of ZS stock, here are some important developments you should be aware of:
Zscaler, Inc. (NASDAQ: ZS) has unveiled cutting-edge security solutions that harness the power of generative AI while safeguarding enterprise intellectual property and customer data. These innovations pave the way for secure AI transformation journeys, empowering IT and security teams. In addition to this, Maxeon Solar Technologies, Ltd., a leading global solar cell and panel manufacturer, has chosen Zscaler's Zero Trust Exchange™ cloud security platform to enable secure access and expedite digital transformation efforts.
Zscaler has also joined forces with the Center for Internet Security in an exciting CIS CyberMarket partnership. This unique alliance brings together the expertise of both organizations and empowers them to work hand in hand with the Elections Infrastructure
Information Sharing and Analysis Center (EI-ISAC) to promote information sharing, bolster cybersecurity measures, and safeguard the integrity of elections.
Based on the above, it’s pretty easy to see that Zscaler Inc has been drawing a lot of good attention and generating a lot of good press, and all of this news and attention is reflecting positively on ZS stock. So whether you’re a trader or an investor, ZS stock is one cybersecurity stock you’ll definitely want to pay attention to!
Zscaler Inc's Overview
Zscaler Inc was founded in 2008 by Jay Chaudhry. The company is currently headquartered in San Jose, California. At the helm of Zscaler Inc is CEO Jay Chaudhry, a renowned cybersecurity expert with a successful track record in the technology industry. With his leadership, Zscaler has emerged as a market leader in cloud security, driving the company's growth and enabling organizations to enhance their digital security posture.
Zscaler Inc (Zscaler) is a leading provider of security-as-a-service platforms. They protect organizations from cyber-attacks and detect data breaches across all connected devices. They do this using a comprehensive suite of services, including ransomware and threat protection, cloud and mobile security, software package deployment, and so much more! Zscaler caters to various sectors such as public, federal, education, government, banking, and finance.
Zscaler Inc has achieved notable milestones throughout its journey in the cybersecurity industry. Some of these include the following:
Funding Success: In August 2012, Zscaler secured a remarkable $38 million in funding from strategic investors, providing a strong financial foundation for its growth and innovation.
Successful IPO: A significant milestone occurred in 2018 when Zscaler successfully completed its initial public offering (IPO). This marked a pivotal moment for the company, solidifying its position and increasing its visibility within the cybersecurity market.
Nasdaq 100 Inclusion: On December 17, 2021, Zscaler stock was added to the prestigious Nasdaq 100 index. This recognition further validated the company's success and underscored its prominence in the industry.
Zscaler has experienced rapid expansion, attracting a large customer base and consistently growing its revenue over the years. These milestones demonstrate Zscaler's continuous progress and success in delivering cutting-edge cloud security solutions to enterprises worldwide.
Zscaler Inc's Business Model and Products/Services
Zscaler generates revenue through its cloud-based cybersecurity solutions. By providing services such as zero-trust network access, cloud firewalls, cloud sandboxing, and other related offerings, Zscaler monetizes its expertise in safeguarding organizations from cyber threats.
Zscaler's main products/services include:
● Zscaler Internet Access
● Zscaler Private Access
● Zscaler Deception
● Zscaler Cloud Protection
● Zscaler Digital Experience
These solutions empower businesses to establish secure access controls, protect against unauthorized network access, and detect and mitigate potential threats in cloud environments.
Zscaler Inc's Financials, Growth, and Valuation Metrics
ZS stock currently has a market cap of 21.10 billion. Zs stock’s financial performance for the quarter ending April 30, 2023, showcased mixed results. The net income experienced a significant decline of 54.59% year-over-year, amounting to -$0.046B. Similarly, the net income for the twelve months ending April 30, 2023, declined by 27.92% to -$0.269B.
However, the company's revenue demonstrated strong growth, with a 46.02% increase year-over-year, reaching $0.419B for the quarter and a 52.58% increase year-over-year, reaching $1.480B for the twelve months.
Over the past five years, Zscaler's revenue has seen a substantial surge, skyrocketing from $190 million in 2018 to $1,091 million in 2022. However, the net profit margin as of April 30, 2023, stands at -18.2%. The company's latest financial reports and stock price indicate a negative trailing price-to-earnings ratio (P/E) of -63.2882, with a P/E ratio of -148 at the end of 2021.
In terms of valuation, ZS stock appears relatively expensive compared to the peer average based on its Price-To-Sales Ratio of 14x versus 8.8x. The current trading price of ZS at $141.71 is below the estimated fair value of $154.86. This suggests that ZS stock is currently undervalued.
ZS Stock Trading Information
Zscaler Inc (ZS) was listed on the NASDAQ stock exchange, its primary exchange, on December 17, 2021. Its ticker symbol is ZS, and the currency and country are the United States and the US Dollar (USD), respectively.
ZS stock follows standard trading hours on the NASDAQ:
Regular Trading Hours: ZS stock can be traded from Monday to Friday, between 9:30 AM and 4:00 PM Eastern Time (ET).
Pre-market Trading: ZS stock offers pre-market trading sessions from Monday to Friday, starting at 4:00 AM ET before regular market hours.
After-market Trading: ZS stock allows after-market trading sessions from Monday to Friday, extending from 4:00 PM to 8:00 PM ET after regular market hours.
ZS stock does not have any history of stock splits. Additionally, it is worth noting that the trailing twelve-month (TTM) dividend payout for ZS stock is currently $0.00. This indicates that Zscaler Inc does not currently provide regular dividend payments to its shareholders.
Overview of ZS Stock Performance
ZS stock closed around the 33.00 price level when it was listed back in 2018, and then the stock price gradually rose until it peaked at the 88.21 price level. ZS stock price then briefly dipped to the 41.98 level before going on a massive bullish run that saw it create an all-time high at the 226.03 level, smash it and then create a new all-time high at the 368.78 price level.
However, this huge run was followed by a dip in ZS stock price to the 89.46 level. ZS stock currently sits around the 144.70 price area, indicating that it might be picking up steam for another bull run targeting the old all-tile high, 368.78.
Key Drivers of ZS Stock Price
There are several things that could serve as key drivers of ZS stock price. Some of these include the following:
Revenue Growth and Performance: One of the key drivers of ZS stock price is the company's revenue growth and financial performance. Investors closely monitor Zscaler's ability to generate consistent and sustainable revenue growth. Strong revenue growth, driven by increasing demand for cloud security solutions, can positively impact the stock price.
Market Opportunity and Competitive Positioning: The market opportunity for cloud security solutions is significant, and Zscaler's ability to capitalize on this opportunity is crucial for its stock price. Investors evaluate the company's competitive positioning, market share, and ability to outperform competitors in terms of innovation, customer acquisition, and market expansion.
Technological Innovation and Product Development: ZS stock price is influenced by the company's ability to innovate and develop new products or enhance existing offerings. Investors closely follow Zscaler's technological advancements and product roadmap to assess its competitiveness and growth potential.
Industry Trends and Cybersecurity Landscape: ZS stock price can be influenced by industry trends and the overall cybersecurity landscape. Investors analyze market trends, regulatory developments, and emerging threats to assess Zscaler's positioning and growth potential.
For example, as mentioned earlier, more companies are focusing on cybersecurity investments. This could potentially catalyze a further increase in ZS stock price valuation. Also, in terms of technological innovation and product development, Zscaler has recently unveiled a suite of innovative cyber solutions designed to help users optimize the power of Generative AI.
Future Prospects of ZS Stock
According to 37 analysts, the average price target for ZS stock is estimated to be $173.35, with price forecasts ranging from $120.00 to $233.00. This average price target indicates a potential increase of 21.48% from the last closing price of $142.70.
Furthermore, ZS stock currently holds an average brokerage recommendation (ABR) of 1.75 on a scale of 1 to 5, where 1 represents a Strong Buy, and 5 represents a Strong Sell. This ABR is calculated based on the recommendations provided by 36 brokerage firms, reflecting a positive sentiment towards ZS stock.
These indicators suggest that analysts and market experts anticipate future growth and value appreciation for Zscaler.
Zscaler's Challenges and Opportunities
ZS stock currently faces a number of risks that could affect its price or valuation. Some of these risks include the following:
Zscaler operates in a highly competitive market, facing competition from various companies in the Systems Software industry. Major competitors include Microsoft (MSFT), CrowdStrike (CRWD), Oracle (ORCL), Fortinet (FTNT), and ServiceNow (NOW). Zscaler needs to continuously assess and respond to competitive threats to maintain its market position.
For example, competitors like Oracle and CrowdStrike could release products that rival the cybersecurity software that Zsacler already has in the market, thus threatening its user reach. However, it has to be said that for now, Zscaler still holds the advantage in providing security for cloud and mobility over competition from legacy providers transitioning models and offerings like Crowdstrike
Some other risks that could affect ZS stock price include the following:
● Regulation on privacy/data use
● Security breaches
● Loss of key customers
● Macro weakness
● Margin pressures
For example in 2021, there was a report that The Zscaler Client Connector for Windows before the version 126.96.36.199 had a DLL hijacking vulnerability. This breach was caused by an error in the configuration of OpenSSL. More incidents like this could result in loss of key customers as users will want to look for options that guarantee them data safety and privacy.
Also, A change in government regulations on data use and data privacy could potentially affect the ability of Zscaler cloud solutions to function optimally. Thus potentially impacting ZS stock prices.
Opportunities for Growth and Expansion
The cybersecurity space might be quite competitive; however, it's also a space with lots of room for growth and expansion. Zscaler operates in a market with high demand for cloud-based cybersecurity solutions. The increasing adoption of cloud services and the need for robust security measures present growth opportunities for Zscaler to expand its customer base and market share.
Future Outlook and Expansion
Zscaler has the opportunity to capitalize on the growing importance of cybersecurity and the increasing need for advanced protection against cyber threats. The company can leverage its expertise and innovative solutions to expand its offerings, penetrate new markets, and drive future growth.
Trading Strategies for ZS Stock
Want to trade ZS stock? Here are some trading strategies and tips you can employ to stay profitable:
Conduct a thorough analysis of Zscaler's financial health and business model. You’ll want to pay attention to factors like revenue growth and earnings as well. This analysis can help you determine the intrinsic value of the stock.
This involves using technical indicators and chart patterns to identify trends, entry and exit points, and potential price targets. These tools can provide insights into the stock's historical price patterns and help you make informed trading decisions.
Some examples of technical analysis strategies for trading ZS stock include:
Moving averages are used to analyze trends by smoothing out price data over a specified period. They calculate the average price over a given time frame and can help identify support and resistance levels or potential trend reversals. From the chart below, we see two scenarios. In the first one, ZS stock price broke below the MA line, indicating a bearish scenario. In the other scenario, the price crosses above the EMA line, signaling it’s time to buy.
Bollinger Bands consist of a moving average, typically a simple moving average, and two standard deviation lines placed above and below it. From the analysis of the ZS stock chart below, we see that when ZS stock price moved into the upper band, what followed was a bearish movement. This movement indicates that price was overbought at that point. Similarly, a movement of ZS stock price into the lower band indicates oversold conditions. As such, what followed is a move to the upside.
Relative Strength Index (RSI)
RSI is a momentum oscillator that measures the speed and change of price movements. RSI values range from 0 to 100. When ZS stock price readings rose above 70, it indicated overbought conditions and a sell was what followed. Similarly, when ZS stock readings dived below 30, ZS stock was oversold and the market moved to correct this by initiating a bull run.
Some other tips include the following:
Risk Management: Implement proper risk management techniques to protect your capital. An example is setting stop-loss orders to limit potential losses.
Stay Informed: Keep up with the latest news, earnings reports, and market developments related to Zscaler and the cybersecurity industry. Changes in the company's leadership, partnerships, or regulatory environment can impact the ZS stock's performance. Use reputable financial news sources and company filings to stay informed.
If you’re looking to invest in ZS stock, there are multiple ways you can go about doing so. However, it should be said that you’ll be hard-pressed to find a better option for trading ZS stock than CFDs.
Advantages of CFD
Some advantages of CFD include the following:
Leverage: CFDs allow traders to access higher market exposure with a smaller initial capital outlay. With this leverage, you can control larger ZS stock positions than your actual investment amount, thus potentially amplifying profits. However, it's important to note that leverage can also increase losses, so risk management is crucial.
Diverse Market Access: CFDs provide access to various markets, including stocks, indices, commodities, currencies, and cryptocurrencies.
Short-Selling: CFDs enable traders to profit from both rising and falling markets. Unlike traditional investments, where you profit only from price increases.
Hedging: You can use CFDs as a hedging tool to offset potential losses in an existing portfolio.
Lower Costs: Trading CFDs often involves lower costs than traditional investing methods. There are typically no ownership fees, stamp duties, or commissions associated with buying or selling the underlying asset.
Trade ZS Stock CFD at VSTAR
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Super Low Trading Cost: VSTAR provides trading services with super low trading costs, allowing investors to minimize expenses associated with executing trades. This can enhance your overall profitability of trading ZS stock.
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Industry-leading Tight Spreads: VSTAR offers industry-leading tight spreads, starting from 0.0 pips. This means that the difference between buying and selling prices is minimal, enabling you to potentially achieve better trade execution and maximize profits.
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The world of cybersecurity is currently garnering a lot of interest, and one particular company (Zscaler Inc), is enjoying a lot of attention. ZS stock is currently estimated to be undervalued and perfectly positioned for potential buyers right now.
Ready to take advantage and maximize ZS stock trading profits? Download the VSTAR app today!