Benzinga | Sep 10, 2021 07:36PM EDT

Why Analysts See Up To 25% Upside In This Security-As-A-Service Firm?

* Analysts mainly lauded Zscaler Inc's (NASDAQ:ZS) 70% year-on-year billings growth above consensus in Q4, network and raised their price targets betting on network transformation, strong security backdrop.

* Piper Sandler analyst Rob Owens raised the PT to $285 from $235, indicating a 3.7% upside, and reiterated a Neutral.

* Owens noted that the tailwinds from the ongoing network transformation and favorable security backdrop contribute to a robust demand environment.

* Canaccord analyst T. Michael Walkley raised the PT to $340 from $300, implying a 23.7% upside, and maintained a Buy.

* Walkley believed Zscaler is increasingly well-positioned for accelerating growth trends given its strong technology moat and accelerating platform uptake.

* Zscaler benefitted from cloud migration, the adoption of Zero Trust principles, and the rapid growth in targeted breaches and ransomware attacks.

* Morgan Stanley analyst Keith Weiss raised the PT to $275 from $215, implying fully priced at the current level.

* While Zscaler's technology positioning and ability to execute to a substantial market opportunity "appears undeniable," Weiss maintained an Equal Weight over the sustainability of the valuation and "remarkable growth."

* JMP Securities analyst Erik Suppiger raised the PT to $330 from $270, signifying a 20% upside, and affirmed an Outperform.

* Mizuho analyst Gregg Moskowitz raised the PT to $320 from $280, indicating a 16.4% upside, and reiterated a Buy.

* The analyst says Zscaler's significant customer momentum is "clearly building."

* Needham analyst Alex Henderson raised the PT to $345 from $280, implying a 25.5% upside, and maintained a Strong Buy.

* BTIG analyst Gray Powell raised the PT to $324 from $279, signifying a 17.8% upside, and affirmed a Buy.

* Barclays analyst Saket Kalia raised the PT to $318 from $289, indicating a 15% upside, and reiterated an Equal Weight.

* The analyst took his margin estimates down despite the revenue upside, saying the company is investing for continued growth.

* Price Action: ZS shares traded lower by 1.51% at $276 on the last check Friday.