Zscaler's superior revenue growth expected to outperform F5 in next three years

From Nasdaq: 2024-12-06 21:35:04

Zscaler stock (NASDAQ: ZS) is favored over F5 stock (NASDAQ: FFIV) due to Zscaler’s superior revenue growth. ZS reported $628 million in Q1 revenue, beating estimates. Despite a recent 8% stock price drop, ZS is expected to outperform FFIV in the next three years with higher revenue growth and better financial position.

Zscaler’s revenue growth rate of 48.1% far surpasses F5’s 2.7% rate, driven by an increase in customer base and subscriptions. While F5 is more profitable, Zscaler has a stronger cash position. ZS stock trades at 14x trailing revenues compared to FFIV’s 5x, indicating potential for higher returns in the future.

Historically, FFIV stock has seen better returns than ZS, but both underperformed the S&P 500. The Trefis High Quality Portfolio has consistently outperformed the index, providing better returns with less risk. Despite the recent decline in ZS’s valuation multiple, the expected surge in revenues will likely drive higher levels for ZS stock. 1. The stock market saw a sharp increase today, with the S&P 500 reaching a record high of 4,239.18, up 0.7% from the previous day. This surge was driven by strong performances from tech and healthcare sectors, as investors remain optimistic about economic recovery.

2. In international news, tensions between Israel and Hamas continue to escalate, with both sides exchanging rocket fire and airstrikes. The death toll has risen to over 100, including children, as calls for a ceasefire grow louder from the international community.

3. The CDC announced that fully vaccinated individuals can now safely participate in indoor and outdoor activities without wearing masks or social distancing. This new guidance comes as vaccination rates increase and COVID-19 cases decline across the United States.

4. Elon Musk’s SpaceX successfully launched another batch of Starlink satellites into orbit, bringing the total number to over 1,600. This move aims to expand global internet coverage and provide high-speed internet access to underserved areas around the world.

5. In sports news, the NBA playoffs are in full swing, with the Brooklyn Nets taking an early lead in their series against the Milwaukee Bucks. Superstar Kevin Durant led the Nets to victory in Game 2, scoring 32 points and securing a 2-0 series lead.



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