What Happened: Shares of cloud security platform Zscaler (NASDAQ:ZS) jumped 5.1% in the morning session after Barclays analyst Saket Kalia upgraded the stock's rating from Equal Weight (Neutral) to Overweight (Buy) and raised the price target from $176 to $190. The price target indicates a potential 13% upside from where shares traded when the upgrade was announced. After the initial pop the shares cooled down to $170.09, up 4.01% from previous close.
Is now the time to buy Zscaler? Find out by reading the original article on StockStory.
What is the market telling us: Zscaler's shares are very volatile and over the last year have had 37 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was five months ago, when the stock gained 16.5% on the news that the company pre-announced an impressive "beat and raise" quarter. Preliminary third-quarter results exceeded analysts' revenue, and operating income estimates. In addition, management raised full-year guidance for revenue, calculated billings, and operating income. Founder and CEO, Jay Chaudhry, added to the optimism, stating that "the high ROI of adopting the Zscaler Zero Trust Exchange platform continues to resonate with customers and prospects in this challenging macro environment." It was a mixed start to the earnings season for cybersecurity stocks, with Tenable, Cloudflare (NYSE:NET), and Check Point Software (NASDAQ:CHKP) all reporting disappointing results. However, the company's impressive announcement means that either the subsector may not be as challenged as feared, that there is company-specific outperformance from Zscaler, or some combination of both.
Zscaler is up 54.4% since the beginning of the year.Investors who bought $1,000 worth of Zscaler's shares 5 years ago would now be looking at an investment worth $4,760.
