Zscaler: Tremendous Opportunity In This Slide

Oct. 04, 2024 8:30 PM ETZscaler, Inc. (ZS) Stock2 Comments
Gary Alexander profile picture
Gary Alexander
28.91K Followers
(10min)

Summary

  • I recommend investors to buy the dip in Zscaler after a ~25% slide in the stock this year.
  • Zscaler slid further when its FY25 outlook slightly missed Street expectations, but its billings results foreshadow stronger growth ahead than its guidance might currently imply.
  • The company has seen stabilization in its sales attrition as well, which may help it deliver a series of beat-and-raise quarters as it begins FY25.
  • Though not cheap at ~9x forward revenue, Zscaler enjoys tremendous secular tailwinds and is a high-quality company overdue for a rebound.
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I often stay away from high-flying stocks as they’re in the euphoric phase, trading mostly on momentum. However, I don’t show away from these plays at all once they stumble, and once we’re able to assess the underlying fundamentals and assign a reasonable valuation

This article was written by

Gary Alexander profile picture
28.91K Followers
With combined experience of covering technology companies on Wall Street and working in Silicon Valley, and serving as an outside adviser to several seed-round startups, Gary Alexander has exposure to many of the themes shaping the industry today. He has been a regular contributor on Seeking Alpha since 2017. He has been quoted in many web publications and his articles are syndicated to company pages in popular trading apps like Robinhood.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of ZS either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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