Zscaler stock declines 16% YTD, but potential for turnaround in 2025

From Nasdaq: 2024-12-24 08:28:00

Zscaler, Inc. (ZS) stock has declined 16.1% YTD, underperforming the market and its cybersecurity peers like FTNT, PANW, and CSCO. Concerns arise from macroeconomic factors and competitive pressures. Despite this, Zscaler’s leadership in Zero Trust cybersecurity, strong financial performance, and customer growth indicate a potential turnaround in 2025.

The Zero Trust security market is expected to grow at a CAGR of 17.1% through 2030, with Zscaler well-positioned to capture a significant share. The company’s focus on innovation, AI-powered solutions, and financial strength drive its growth trajectory. Strong first-quarter results demonstrate Zscaler’s ability to navigate challenging economic conditions.

Zscaler’s expanding customer base, with 585 customers generating over $1 million ARR, highlights its market penetration among Fortune 500 and Global 2000 companies. Analysts have revised upward their earnings estimates for 2025 and 2026, reflecting confidence in Zscaler’s growth prospects. The company’s strategic focus on large enterprises is expected to drive revenue growth in the coming year.

Investors looking for exposure to the cybersecurity sector may consider Zscaler as a long-term investment. The stock’s potential turnaround in 2025, driven by market recovery and demand for its solutions, makes it a compelling buy. With a Zacks Rank #2 (Buy), ZS stock shows promise for future growth and value creation.



Read more at Nasdaq: Zscaler Declines 16% YTD: Will the Stock Make a Turnaround in 2025?