Zscaler stock jumped Tuesday after the cybersecurity firm reported earnings, revenue and billings for its fiscal third quarter that topped Wall Street targets. The company’s revenue outlook also came in above views.
San Jose, Calif-based Zscaler (ZS) reported April-quarter earnings after the market close. Zscaler said it earned 15 cents a share on an adjusted basis, more than doubling its profit from 7 cents in the year-earlier period. Revenue rose 60% to $176.4 million, the company said.
Analysts expected Zscaler earnings of 7 cents per share on sales of $163.7 million. Billings rose 71% to $225 million compared with estimates of $183.3 million.
For the quarter ending in July, Zscaler expects revenue of $186 million vs. analyst estimates of $174.4 million.
Zscaler Stock: Relative Strength Rating Of 69
Zscaler stock popped 8% to 186.50 during after-hours trading on the stock market today. Heading into the Zscaler earnings report, the company owned a Relative Strength Rating of 69 out of a best-possible 99, according to IBD MarketSmith analysis.
In addition, Zscaler announced the acquisition of Smokescreen Technologies, a specialist in active defense and deception technology. Financial terms were not disclosed.
Zscaler stock has retreated from an all-time high of 230.88 set on Feb. 16 amid a broad sell-off in software growth stocks.
The company faces tough year-over-year comparisons in 2021. Zscaler stock jumped in 2020 as a corporate shift to remote work amid the coronavirus emergency increased demand for its web security gateways that inspect customers’ data traffic for malware.
As economies normalize, the big question is whether a corporate shift to cloud computing-based security platforms, such as Zscaler’s, will slow down.
Computer Software Security Group
Zscaler provides cloud-based cybersecurity services via 150 data centers worldwide. The Zscaler Private Access, or ZPA cloud service, replaces virtual private networks, or VPNs, to support remote work.
The Computer Software Security group is ranked No. 100 out of 197 industry groups tracked, according to IBD Stock Checkup. Zscaler is one of many cloud-based computer security companies to watch. Another is CrowdStrike Holdings (CRWD).
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.