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Zscaler (ZS) to Report Q2 Earnings: What's in The Offing?
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Zscaler (ZS - Free Report) is slated to report second-quarter fiscal 2022 results on Feb 24.
For the second quarter, Zscaler projects total revenues between $240 million and $242 million. The Zacks Consensus Estimate for the same is pegged at $242 million, suggesting growth of 54.1% from the year-ago quarter.
Zscaler anticipates non-GAAP earnings to be approximately 11 cents per share. The Zacks Consensus Estimate for the same stands at 11 cents per share, indicating a year-over-year rise of 10%.
The company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 52.9%.
Zscaler’s second-quarter results are likely to reflect continued solid demand for its security and networking products, given the healthy environment of the global security market.
Solid adoption of its in-cloud security platform, Zscaler’s Zero Trust Exchange, owing to the on-going digital transformation across enterprises, is likely to have acted as a key catalyst.
With work from anywhere being the new normal amid the ongoing pandemic, an increasing number of people have been logging into employers' networks through off-premises locations, which has triggered the need for greater security. This trend is anticipated to have spurred demand for Zscaler’s products in the quarter under review.
Zscaler’s existing core products, especially the ZIA (“Zscaler Internet Access”) and the ZPA (“Zscaler Private Access”), have been driving strong customer retention. The addition of new capabilities to its Zero Trust Exchange, such as Cloud Access Security Broker, Cloud Browser Isolation, Cloud Protection, Zscaler Digital Experience (“ZDX”) and Cloud Security Posture Management (“CSPM”) for Software-as-a-service (“SaaS”) applications are likely to have driven its product portfolio expansion and aided customer acquisition.
Increased adoption of Software-Defined Wide Area Network (“SD-WAN”) solutions might have acted as a key growth driver in the quarter to be reported. Research firm MarketsandMarkets, predicts that the market size for SD-WAN solutions is likely to reach $8.4 billion by 2025 from $1.9 billion in 2020, witnessing a CAGR of 34.5%.
As there are only a few vendors that offer security and SD-WAN solutions, Zscaler has been capitalizing on the increasing opportunities in the market. The company’s collaboration with both VMware and Silver Peak has been helping it secure SD WAN deployments. This is likely to have positively impacted Zscaler’s fiscal second-quarter performance.
Nonetheless, during its first-quarter fiscal 2022 earnings conference call, Zscaler had cautioned that some of its emerging products, including ZDX, Workload Segmentation and CSPM might report lower gross margins than its core products in the fiscal second quarter.
Additionally, increased investments to enhance sales and marketing (S&M) capabilities, and higher research and development (R&D) expenses may have weighed on the company’s to-be-reported quarter’s bottom line. The company witnessed a year-over-year increase of 63.4% in S&M and 58.4% in R&D expenses in the first quarter. Total operating expenses climbed 59.5% year-over-year in the first quarter mainly due to increased hiring and higher compensation expenses.
What Our Model Says
Our proven model predicts an earnings beat for Zscaler this season. The combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.
Zscaler currently has a Zacks Rank #2 and an Earnings ESP of +3.60%. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.
Other Stocks With Favorable Combinations
Per our model, Cushman & Wakefield (CWK - Free Report) , Nielsen and Jones Lang LaSalle (JLL - Free Report) also have the right combination of elements to post an earnings beat in their upcoming releases.
Cushman & Wakefield has a Zacks Rank #1 and an Earnings ESP of +6.45%. The company is scheduled to report fourth-quarter 2021 results on Feb 24. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 110.3%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for the fourth-quarter earnings of Cushman & Wakefield is pegged at 62 cents per share, suggesting year-over-year growth of 44.2%. The consensus mark for revenues stands at $2.66 billion, indicating a decline of 17.1% year over year.
Nielsen is slated to report fourth-quarter 2021 results on Feb 28. The stock has a Zacks Rank #2 and an Earnings ESP of +2.78%. Its earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 25.1%.
The Zacks Consensus Estimate for Nielsen’s quarterly earnings stands at 36 cents per share, suggesting a year-over-year decline of 32.1%. Its quarterly revenues are estimated to decrease 46.3% year over year to $897.6 million.
Jones Lang LaSalle has a Zacks Rank #2 and an Earnings ESP of +9.23%. The company is scheduled to report fourth-quarter 2021 results on Feb 28. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 128.7%.
The Zacks Consensus Estimate for Jones Lang LaSalle's fourth-quarter earnings is pegged at $6.68 per share, suggesting year-over-year growth of 26.3%. The consensus mark for revenues stands at $5.51 billion, indicating a year-over-year improvement of 13.7%.
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Zscaler (ZS) to Report Q2 Earnings: What's in The Offing?
Zscaler (ZS - Free Report) is slated to report second-quarter fiscal 2022 results on Feb 24.
For the second quarter, Zscaler projects total revenues between $240 million and $242 million. The Zacks Consensus Estimate for the same is pegged at $242 million, suggesting growth of 54.1% from the year-ago quarter.
Zscaler anticipates non-GAAP earnings to be approximately 11 cents per share. The Zacks Consensus Estimate for the same stands at 11 cents per share, indicating a year-over-year rise of 10%.
The company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 52.9%.
Zscaler, Inc. Price and EPS Surprise
Zscaler, Inc. price-eps-surprise | Zscaler, Inc. Quote
Factors to Note
Zscaler’s second-quarter results are likely to reflect continued solid demand for its security and networking products, given the healthy environment of the global security market.
Solid adoption of its in-cloud security platform, Zscaler’s Zero Trust Exchange, owing to the on-going digital transformation across enterprises, is likely to have acted as a key catalyst.
With work from anywhere being the new normal amid the ongoing pandemic, an increasing number of people have been logging into employers' networks through off-premises locations, which has triggered the need for greater security. This trend is anticipated to have spurred demand for Zscaler’s products in the quarter under review.
Zscaler’s existing core products, especially the ZIA (“Zscaler Internet Access”) and the ZPA (“Zscaler Private Access”), have been driving strong customer retention. The addition of new capabilities to its Zero Trust Exchange, such as Cloud Access Security Broker, Cloud Browser Isolation, Cloud Protection, Zscaler Digital Experience (“ZDX”) and Cloud Security Posture Management (“CSPM”) for Software-as-a-service (“SaaS”) applications are likely to have driven its product portfolio expansion and aided customer acquisition.
Increased adoption of Software-Defined Wide Area Network (“SD-WAN”) solutions might have acted as a key growth driver in the quarter to be reported. Research firm MarketsandMarkets, predicts that the market size for SD-WAN solutions is likely to reach $8.4 billion by 2025 from $1.9 billion in 2020, witnessing a CAGR of 34.5%.
As there are only a few vendors that offer security and SD-WAN solutions, Zscaler has been capitalizing on the increasing opportunities in the market. The company’s collaboration with both VMware and Silver Peak has been helping it secure SD WAN deployments. This is likely to have positively impacted Zscaler’s fiscal second-quarter performance.
Nonetheless, during its first-quarter fiscal 2022 earnings conference call, Zscaler had cautioned that some of its emerging products, including ZDX, Workload Segmentation and CSPM might report lower gross margins than its core products in the fiscal second quarter.
Additionally, increased investments to enhance sales and marketing (S&M) capabilities, and higher research and development (R&D) expenses may have weighed on the company’s to-be-reported quarter’s bottom line. The company witnessed a year-over-year increase of 63.4% in S&M and 58.4% in R&D expenses in the first quarter. Total operating expenses climbed 59.5% year-over-year in the first quarter mainly due to increased hiring and higher compensation expenses.
What Our Model Says
Our proven model predicts an earnings beat for Zscaler this season. The combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.
Zscaler currently has a Zacks Rank #2 and an Earnings ESP of +3.60%. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.
Other Stocks With Favorable Combinations
Per our model, Cushman & Wakefield (CWK - Free Report) , Nielsen and Jones Lang LaSalle (JLL - Free Report) also have the right combination of elements to post an earnings beat in their upcoming releases.
Cushman & Wakefield has a Zacks Rank #1 and an Earnings ESP of +6.45%. The company is scheduled to report fourth-quarter 2021 results on Feb 24. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 110.3%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for the fourth-quarter earnings of Cushman & Wakefield is pegged at 62 cents per share, suggesting year-over-year growth of 44.2%. The consensus mark for revenues stands at $2.66 billion, indicating a decline of 17.1% year over year.
Nielsen is slated to report fourth-quarter 2021 results on Feb 28. The stock has a Zacks Rank #2 and an Earnings ESP of +2.78%. Its earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 25.1%.
The Zacks Consensus Estimate for Nielsen’s quarterly earnings stands at 36 cents per share, suggesting a year-over-year decline of 32.1%. Its quarterly revenues are estimated to decrease 46.3% year over year to $897.6 million.
Jones Lang LaSalle has a Zacks Rank #2 and an Earnings ESP of +9.23%. The company is scheduled to report fourth-quarter 2021 results on Feb 28. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 128.7%.
The Zacks Consensus Estimate for Jones Lang LaSalle's fourth-quarter earnings is pegged at $6.68 per share, suggesting year-over-year growth of 26.3%. The consensus mark for revenues stands at $5.51 billion, indicating a year-over-year improvement of 13.7%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.