Zscaler Positioned for Growth: Buy Rating Backed by Strong SASE Market Momentum and Expanding TAM

In a report released today, Joseph Gallo from Jefferies maintained a Buy rating on Zscaler (ZS – Research Report), with a price target of $295.00.

Joseph Gallo has given his Buy rating due to a combination of factors that suggest Zscaler is well-positioned for growth. The company is expected to exceed its third-quarter billing guidance, driven by strong momentum in the Secure Access Service Edge (SASE) market. This positive outlook is supported by survey data and anecdotal evidence indicating that Zscaler continues to perform well against expectations, with significant enterprise demand.
Additionally, Zscaler’s sales efficiency improvements and platform expansion are anticipated to sustain robust growth, with billing growth projected in the low-to-mid-20% range for fiscal year 2025. The company’s free cash flow margin is also improving, which is likely to drive share prices higher. Furthermore, Zscaler’s valuation is supported by a large and expanding total addressable market, justifying the price target set by Gallo despite the associated risk profile.

According to TipRanks, Gallo is a 5-star analyst with an average return of 15.3% and a 70.54% success rate. Gallo covers the Technology sector, focusing on stocks such as CyberArk Software, Palo Alto Networks, and CrowdStrike Holdings.

In another report released on May 19, Barclays also maintained a Buy rating on the stock with a $275.00 price target.