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For the fourth quarter, Zscaler projects total revenues between $429 million and $431 million. The Zacks Consensus Estimate is pegged at $430.4 million, suggesting growth of 35.3% from the year-ago quarter.
Zscaler anticipates non-GAAP earnings of approximately 49 cents per share. The Zacks Consensus Estimate for the bottom line is pegged at 49 cents per share, indicating a whopping 96% increase from the year-ago quarter’s earnings of 25 cents.
The cloud-based security solution provider projects non-GAAP income from operations between $69 million and $70 million. The company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 19.6%.
Let’s see how things are shaping up for this announcement.
Zscaler’s fourth-quarter results are likely to reflect the continued solid demand for its security and networking products, given the healthy environment of the global security market. The solid adoption of its in-cloud security platform, Zero Trust Exchange, due to the ongoing digital transformation across enterprises is likely to have acted as a key catalyst.
With hybrid work being the new normal, 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 the demand for Zscaler’s products in the quarter under review.
The increased adoption of Software-Defined Wide Area Network (“SD-WAN”) solutions may have acted as a key growth driver in the quarter to be reported. Per the latest Verified Market Research report, the market size for SD-WAN solutions could reach $44.2 billion in 2030 from $2.83 billion in 2023, indicating a CAGR of 35.9% during the forecast period.
As there are only a few vendors that offer security and SD-WAN solutions, ZS has been capitalizing on the increasing opportunities in the market. The company’s collaboration with VMware and Silver Peak has been helping it secure SD-WAN deployments. This is likely to have aided Zscaler’s fiscal fourth-quarter performance.
ZS’ existing core products, especially the Zscaler Internet Access and the Zscaler Private Access, have been driving 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 and Cloud Security Posture Management for Software-as-a-service applications, is likely to have driven its product portfolio expansion and customer acquisition.
Our estimate for fourth-quarter sales from Channel Partners and Direct Customers are pegged at $398.9 million and $30.7 million, respectively. We expect the remaining performance obligation (“RPO”) at the end of fourth-quarter to be approximately $3.04 billion.
However, 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.
Zscaler witnessed a year-over-year increase of 41.9% in non-GAAP S&M and 43.5% in non-GAAP R&D expenses in the last reported quarter. Total non-GAAP operating expenses climbed 43.5% year over year in the last reported quarter.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for Zscaler this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.
ZS currently carries a Zacks Rank #3 and has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Per our model, The Toro Company (TTC - Free Report) , Dave & Buster’s Entertainment (PLAY - Free Report) and Casey's General Stores (CASY - Free Report) have the right combination of elements to post an earnings beat in their upcoming releases.
Toro carries a Zacks Rank #2 and has an Earnings ESP of +0.54%. The company is scheduled to report third-quarter fiscal 2023 results on Sep 7. Its earnings beat the Zacks Consensus Estimate in the preceding four quarters, with the average surprise being 4.6%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Toro’s third-quarter earnings stands at $1.23 per share, 3.4% higher than the year-ago quarter. It is estimated to report revenues of $1.22 billion, which suggests an increase of approximately 5.2% from the year-ago quarter.
Dave & Buster’s carries a Zacks Rank #3 and has an Earnings ESP of +0.99%. The company is slated to report second-quarter fiscal 2024 results on Sep 6. Its earnings beat the Zacks Consensus Estimate thrice in the preceding four quarters while missing on one occasion, with the average surprise being 6.8%.
The Zacks Consensus Estimate for PLAY’s second-quarter earnings is pegged at 94 cents per share, indicating a year-over-year increase of 54.1%. The consensus mark for revenues stands at $558.4 million, suggesting a year-over-year increase of 19.2%.
Casey’s is anticipated to report first-quarter fiscal 2024 results on Sep 11. The company has a Zacks Rank #3 and an Earnings ESP of +1.29% at present. Casey’s earnings beat the Zacks Consensus Estimate twice in the trailing four quarters while missing on two occasions, the average surprise being 7.5%.
The Zacks Consensus Estimate for CASY’s first-quarter earnings is pegged at $3.36 per share, suggesting a decline of 17.9% from the year-ago quarter’s earnings of $4.09. Casey’s quarterly revenues are estimated to decrease 13.5% year over year to $3.85 billion.
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Zscaler (ZS) to Report Q4 Earnings: What's in the Offing?
Zscaler (ZS - Free Report) is scheduled to report fourth-quarter fiscal 2023 results on Sep 5 after market close.
For the fourth quarter, Zscaler projects total revenues between $429 million and $431 million. The Zacks Consensus Estimate is pegged at $430.4 million, suggesting growth of 35.3% from the year-ago quarter.
Zscaler anticipates non-GAAP earnings of approximately 49 cents per share. The Zacks Consensus Estimate for the bottom line is pegged at 49 cents per share, indicating a whopping 96% increase from the year-ago quarter’s earnings of 25 cents.
The cloud-based security solution provider projects non-GAAP income from operations between $69 million and $70 million. The company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 19.6%.
Let’s see how things are shaping up for this announcement.
Zscaler, Inc. Price and EPS Surprise
Zscaler, Inc. price-eps-surprise | Zscaler, Inc. Quote
Factors to Note Ahead of Q4 Results
Zscaler’s fourth-quarter results are likely to reflect the continued solid demand for its security and networking products, given the healthy environment of the global security market. The solid adoption of its in-cloud security platform, Zero Trust Exchange, due to the ongoing digital transformation across enterprises is likely to have acted as a key catalyst.
With hybrid work being the new normal, 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 the demand for Zscaler’s products in the quarter under review.
The increased adoption of Software-Defined Wide Area Network (“SD-WAN”) solutions may have acted as a key growth driver in the quarter to be reported. Per the latest Verified Market Research report, the market size for SD-WAN solutions could reach $44.2 billion in 2030 from $2.83 billion in 2023, indicating a CAGR of 35.9% during the forecast period.
As there are only a few vendors that offer security and SD-WAN solutions, ZS has been capitalizing on the increasing opportunities in the market. The company’s collaboration with VMware and Silver Peak has been helping it secure SD-WAN deployments. This is likely to have aided Zscaler’s fiscal fourth-quarter performance.
ZS’ existing core products, especially the Zscaler Internet Access and the Zscaler Private Access, have been driving 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 and Cloud Security Posture Management for Software-as-a-service applications, is likely to have driven its product portfolio expansion and customer acquisition.
Our estimate for fourth-quarter sales from Channel Partners and Direct Customers are pegged at $398.9 million and $30.7 million, respectively. We expect the remaining performance obligation (“RPO”) at the end of fourth-quarter to be approximately $3.04 billion.
However, 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.
Zscaler witnessed a year-over-year increase of 41.9% in non-GAAP S&M and 43.5% in non-GAAP R&D expenses in the last reported quarter. Total non-GAAP operating expenses climbed 43.5% year over year in the last reported quarter.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for Zscaler this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.
ZS currently carries a Zacks Rank #3 and has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Per our model, The Toro Company (TTC - Free Report) , Dave & Buster’s Entertainment (PLAY - Free Report) and Casey's General Stores (CASY - Free Report) have the right combination of elements to post an earnings beat in their upcoming releases.
Toro carries a Zacks Rank #2 and has an Earnings ESP of +0.54%. The company is scheduled to report third-quarter fiscal 2023 results on Sep 7. Its earnings beat the Zacks Consensus Estimate in the preceding four quarters, with the average surprise being 4.6%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Toro’s third-quarter earnings stands at $1.23 per share, 3.4% higher than the year-ago quarter. It is estimated to report revenues of $1.22 billion, which suggests an increase of approximately 5.2% from the year-ago quarter.
Dave & Buster’s carries a Zacks Rank #3 and has an Earnings ESP of +0.99%. The company is slated to report second-quarter fiscal 2024 results on Sep 6. Its earnings beat the Zacks Consensus Estimate thrice in the preceding four quarters while missing on one occasion, with the average surprise being 6.8%.
The Zacks Consensus Estimate for PLAY’s second-quarter earnings is pegged at 94 cents per share, indicating a year-over-year increase of 54.1%. The consensus mark for revenues stands at $558.4 million, suggesting a year-over-year increase of 19.2%.
Casey’s is anticipated to report first-quarter fiscal 2024 results on Sep 11. The company has a Zacks Rank #3 and an Earnings ESP of +1.29% at present. Casey’s earnings beat the Zacks Consensus Estimate twice in the trailing four quarters while missing on two occasions, the average surprise being 7.5%.
The Zacks Consensus Estimate for CASY’s first-quarter earnings is pegged at $3.36 per share, suggesting a decline of 17.9% from the year-ago quarter’s earnings of $4.09. Casey’s quarterly revenues are estimated to decrease 13.5% year over year to $3.85 billion.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.