Cloud security company Zscaler (ZS) is set to report its Q4 results on September 2 after the market closes. Analysts are expecting earnings per share to come in at $0.80 on revenue of $706.94 million. This equates to a 9.1% decrease in EPS but a 19.2% increase in revenue on a year-over-year basis. Ideally, earnings per share should grow faster than revenue as this demonstrates a high degree of operating and financial leverage in the business.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Nevertheless, it’s worth noting that Zscaler has beaten earnings estimates every quarter since its 2021 Q4, and by a wide margin. Therefore, it’s possible that EPS will grow year-over-year and outpace revenue growth. And it seems like this winning trend could continue, at least according to Barclays.
Indeed, five-star analyst Saket Kalia recently raised his price target on Zscaler from $290 to $300 and still rates the stock as a Buy. The firm thinks that Zscaler might guide for 19% to 20% annual recurring revenue growth in Fiscal 2026, with 20% being the best-case scenario that bullish investors are hoping for. Barclays is positive on Zscaler’s outlook going into the new fiscal year due to a stronger and more experienced sales team, along with a wider platform strategy.
What Do Options Traders Anticipate?
Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. The expected earnings move is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement. If this sounds complicated, don’t worry, the Options tool does this for you. Indeed, it currently says that options traders are expecting a 10.5% move in either direction.
Is ZS Stock a Buy, Sell, or Hold?
Overall, analysts have a Strong Buy consensus rating on ZS stock based on 24 Buys, five Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average ZS price target of $323.17 per share implies 16.7% upside potential. At the same time, TipRanks’ AI analyst has an Outperform rating and a $303 per share price target.
