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Zscaler Jumps on Earnings Beat and Wedbush Price-Target Lift

Zscaler shares jump after reporting earnings, revenue and billings for its fiscal first quarter that top Wall Street targets, prompting a price-target boost.

Zscaler  (ZS) - Get Free Report stock jumped on Wednesday after the cybersecurity company reported earnings, revenue and billings for its fiscal first quarter that topped Wall Street targets.

Zscaler shares were up nearly 7% in premarket trading after the San Jose company said it earned 14 cents a share on an adjusted basis in its fiscal first quarter, the same as a year ago. Revenue rose 62% to $230.5 million, the company said.

Analysts polled by FactSet had been expecting Zscaler to post earnings of 12 cents a share on sales of $212 million. Billings rose 71% to $247.7 million, well surpassing analyst estimates of $204 million.

Wedbush Securities analyst Dan Ives called the earnings another “beat-and-raise special from the ZS machine,” holding his outperform rating on the stock but bumping his one-year price target up to $400 from $320.

Related: Cybersecurity Stocks Should Be in Every Investor's Portfolio

“We believe (Zscaler) looks to be in the driver’s seat on the cloud cyber security shift over the next decade and in our opinion the current IT backdrop has only accelerated its ability to capture it,” Ives said, adding that his group sees Zscaler as “…the best pure play in the cloud security arena.”

“We continue to hear from CIOs/CISOs there is an increasing need (exacerbated by SolarWinds and Colonial hack (SWI) - Get Free Report to secure applications, data, and consumers outside the firewall, speaking directly to the large TAM for ZS going forward and its massive market opportunity."

For the current fiscal quarter ending in January, Zscaler said it expects earnings of 11 cents a share amid higher investments in its sales force. Analysts polled by FactSet had been projecting earnings of 12 cents a share. Zscaler said it expects revenue of $241 million vs. estimates of $224.8 million.

At last check, shares of Zscaler were up 5.47% at $365.96. Year to date the stock has climbed 76.94%.