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Solid Portfolio Strength to Aid Zscaler's (ZS) Q4 Earnings

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Zscaler, Inc. (ZS - Free Report) is scheduled to report fourth-quarter fiscal 2020 results on Sep 9.

The company’s performance is likely to have gained from its solid product portfolio strength and strong demand for cloud-based security products amid the COVID-19 pandemic-led remote working wave during the soon-to-be-reported quarter.

Click here to see how the company fared in the fiscal fourth quarter.

Zscaler Benefiting From Strong Portfolio Strength

Zscaler’s portfolio strength provides a boost to its competitive edge and helps add users, a trend that most likely continued in the fourth quarter of fiscal 2020 as well. Notably, its unique offerings include four architectural advantages that firewalls cannot add. These include Edge cloud for policy enforcement, multi-tenancy, proxy for SSL or TLS inspection and zero trust network access.

Zscaler’s ability to provide cloud-based security solutions irrespective of the users’ “device or location” is a key catalyst. This, in turn, is likely to have aided the Zacks Rank #2 (Buy) company win customers in the to-be-reported quarter. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Furthermore, the company became the first cloud security provider to emerge as a certified partner in the Microsoft’s (MSFT - Free Report) Networking Partner Program (NPP) for Office 365. Zscaler cloud’s capability to effectively handle web traffic and block any unnecessary interference on Office 365 is noteworthy.

Moreover, the integration of Zscaler platform with CrowdStrike (CRWD - Free Report) is expected to have helped the former tap the Global 2000 customers. The company’s collaboration with both VMware (VMW - Free Report) and Silver Peak is helping it secure the SD WAN deployments.

Additionally, strength in channel partnerships with large system integrators and global service providers, which contributes to more than 50% of revenues, is anticipated to have been a major driver.

However, hefty investments in sales, cloud infrastructure and new product innovation are expected to have strained margins during the period under consideration.

Coronavirus Pandemic Spurring Cloud Security Demand

Zscaler’s quarterly results are expected to reflect benefits from continued solid demand for its products, given the healthy environment of the global security market.

A huge global workforce is working remotely in an effort to contain the spread of coronavirus. However, an increasing number of people logging into employers' networks has been triggering a greater need for security. This trend might have spurred demand for Zscaler’s products during the fiscal fourth quarter.

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