Posted 3/27/2024, 1:44:46 AM
Zscaler Stock Lags Despite Strong Fundamentals; Competition and Decelerating Growth Weigh
- Zscaler's stock has lagged cybersecurity peers despite strong financials and valuation, possibly due to growing competition, decelerating growth, or ongoing losses
- Demand environment has stabilized, but scrutiny remains high; Zscaler expects zero trust budgets to increase in 2024
- Recently launched new products like Risk360 and Business Insights, though impact is small currently
- Revenue grew 35% YoY in Q2 2023 to $525M with billings up 27%, but growth is decelerating
- Appears undervalued given growth, margin profile and competitive position; stock could see valuation expansion once growth stabilizes