Cloud security platform Zscaler (NASDAQ:ZS) will be reporting results this Tuesday afternoon. Here’s what investors should know.
Zscaler beat analysts’ revenue expectations by 1.6% last quarter, reporting revenues of $678 million, up 22.6% year on year. It was a very strong quarter for the company, with full-year EPS guidance exceeding analysts’ expectations and a solid beat of analysts’ annual recurring revenue estimates.
Is Zscaler a buy or sell going into earnings? Read our full analysis here, it’s free.
This quarter, analysts are expecting Zscaler’s revenue to grow 19.4% year on year to $707.7 million, slowing from the 30.3% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.80 per share.
The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Zscaler has only missed Wall Street’s revenue estimates once over the last two years, exceeding top-line expectations by 3% on average.
Looking at Zscaler’s peers in the cybersecurity segment, some have already reported their Q2 results, giving us a hint as to what we can expect. Palo Alto Networks delivered year-on-year revenue growth of 15.8%, beating analysts’ expectations by 1.4%, and Varonis Systems reported revenues up 16.7%, topping estimates by 2.8%. Palo Alto Networks traded up 3% following the results while Varonis Systems was also up 5.3%.
Read our full analysis of Palo Alto Networks’s results here and Varonis Systems’s results here.
There has been positive sentiment among investors in the cybersecurity segment, with share prices up 3.2% on average over the last month. Zscaler is down 3.1% during the same time and is heading into earnings with an average analyst price target of $316.75 (compared to the current share price of $277.09).
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