Zscaler Inc. stock fell in the extended session Thursday after the cybersecurity company joined the choir of cloud-software companies fretting about reluctant recession-leery customers, and praising upsells to loyal customers, while hiking their outlook and announcing layoffs.
Zscaler
ZS,
+4.43%
shares dropped 12% after hours, following a 4.4% gain in the regular session to close at $134.13, after the company saw a slowing in its billings in the current quarter.
“For Q3, we’re assuming billings to decline by approximately 9% sequentially compared to the mid-single digit percentage declines we’ve seen over the last few years,” Remo Canessa, Zscaler chief financial officer, told analysts on the call.
For the second quarter, Zscaler reported billings, or revenue plus deferred revenue acquired over the quarter, of $493.8 million in the second quarter, while Wall Street expected billings of $491 million. A 9% decline would be about $449.4 million,…
2023-03-02 17:59:00
Link from www.marketwatch.com
Online security company Zscaler saw a significant drop in their stock value on Tuesday, as investors became anxious over the delay of a major deal. The stock plunged 12%, and analysts are suggesting that the overall outlook of the company’s future may suffer as a result.
The deal in question is a partnership with a large enterprise, one that could substantially increase Zscaler’s value in the cloud security space. However, Zscaler revealed on their quarterly earnings call last week that the signing of this deal had been delayed until the company’s fourth quarter.
Despite a growing revenue base, investors’ worries about the delay are overshadowing Zscaler’s greater performance, which included a 73% jump in revenue to $127 million. Company executives have expressed optimism, citing strong momentum from the cloud security opportunities they’re chasing and solid progress on their stated goals.
Despite the news, analysts remain positive on the stock and suggest that if Zscaler can land the anticipated deal, the stock will rebound. Zscaler still remains a long-term buy, with a twelve-month price target of over $142, a green light for those looking to get in on the action.
At the same time, analysts remain cautious and suggest that further delays on this major deal could further hurt the stock price going forward. Investors would be wise to keep an eye on how the situation develops and make decisions accordingly.