Zscaler reported revenue growth and raised guidance, but stock price fell

From Nasdaq: 2024-12-06 04:35:00

Zscaler struggled in 2024

Despite reporting solid revenue growth and increasing guidance, Zscaler’s share price fell after releasing its Q1 2025 results. Revenue rose 26% to $628 million, but calculated billings growth disappointed investors. The stock is down 10% for the year.

Positive outlook

Zscaler raised its full-year revenue and adjusted EPS guidance, now expecting revenue between $2.623 billion and $2.643 billion and adjusted EPS of $2.94 to $2.99. The company continues to see growth in existing customer upsells and adoption of new solutions.

Investment opportunity

Zscaler trades at a forward price-to-sales ratio of about 9.6 with revenue growth over 25%. Forecasted billings growth of 19-20% for the year indicates potential upside. The company’s focus on AI solutions and data security positions it well for future success in the cybersecurity space.

Consideration before investing

While Zscaler shows promise, investors should weigh their options. The Motley Fool’s Stock Advisor team identified 10 top stocks, excluding Zscaler, that could offer significant returns. Stock Advisor has outperformed the S&P 500 since 2002, providing valuable insights and stock picks.

Read more at Nasdaq: Zscaler Shares Fall Despite Raised Guidance. Is It Time to Buy the Stock on the Dip?