Shares of cloud security solutions provider Zscaler (NASDAQ:ZS) are tanking today after the company’s second-quarter numbers failed to cheer investors.
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Revenue rose 51.7% year-over-year to $387.6 million, outperforming expectations by $22.8 million. EPS at $0.37 too, came in better than expectations by $0.08. During the quarter, calculated billings rose 34% over the prior year to $493.8 million. Further, deferred revenue rose 46% over the prior year to $1.11 billion.
Last month, ZS also acquired SaaS security platform provider Canonic Security. The move boosts ZS’ data protection services. The company also plans to lower its headcount by 3% by the end of the year while concerns remain about a decline in billings and longer deal closure timelines.
Looking ahead, for 2023, the company sees revenue landing between $1.56 billion and $1.56 billion. EPS is anticipated to hover between $1.52 and $1.53.
Overall, Wall Street has a consensus price target of $163 on ZS, implying a 21.5% potential upside in the stock. That’s on top of a 7.3% gain in the share price so far this year.
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