We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Zscaler (ZS) to Report Q1 Earnings: What's in the Cards?
Read MoreHide Full Article
Zscaler (ZS - Free Report) is scheduled to report first-quarter fiscal 2024 results on Nov 27 after market close.
For the first quarter, Zscaler projects total revenues between $472 million and $474 million. The Zacks Consensus Estimate is pegged at $473.4 million, suggesting growth of 33.2% from the year-ago quarter.
Zscaler anticipates non-GAAP earnings between 48 cents and 49 cents per share. The Zacks Consensus Estimate for the bottom line is pegged at 49 cents per share, indicating a whopping 69% increase from the year-ago quarter’s earnings of 29 cents.
The cloud-based security solution provider projects non-GAAP income from operations between $70 million and $72 million. The company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 21%.
Let’s see how things are shaping up for this announcement.
Zscaler’s first-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 2021, 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 first-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 first-quarter sales from Channel Partners and Direct Customers is pegged at $433 million and $40.1 million, respectively. We expect the remaining performance obligation (RPO) at the end of the first quarter to be approximately $3.65 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 22.9% in non-GAAP S&M and 38.6% in non-GAAP R&D expenses in the last reported quarter. Total non-GAAP operating expenses climbed 27% 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 #4 (Sell) 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, Micron Technology (MU - Free Report) , Snowflake (SNOW - Free Report) and Marvell Technology (KEYS - Free Report) have the right combination of elements to post an earnings beat in their upcoming releases.
Micron carries a Zacks Rank #3 and has an Earnings ESP of +26.69%. The company is scheduled to report first-quarter fiscal 2024 results on Dec 20. Its earnings surpassed the Zacks Consensus Estimate twice in the trailing four quarters while missing on two occasions, the average surprise being -67.7%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Micron’s first-quarter earnings is pegged at a loss of $1.02 per share, way higher than the year-ago quarter’s loss of 4 cents. The consensus mark for revenues stands at $4.43 billion, suggesting a year-over-year increase of 8.5%.
Snowflake is slated to report third-quarter fiscal 2024 results on Nov 29. The company has a Zacks Rank #2 and an Earnings ESP of +67.33% at present. Snowflake’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 244.5%.
The Zacks Consensus Estimate for third-quarter earnings is pegged at 16 cents per share, suggesting an increase of 45.6% from the year-ago quarter’s earnings of 11 cents. Snowflake’s quarterly revenues are estimated to grow 27.6% year over year to $710.5 million.
Marvell carries a Zacks Rank #3 and has an Earnings ESP of +0.18%. The company is scheduled to report third-quarter fiscal 2024 results on Nov 30. Its earnings beat the Zacks Consensus Estimate thrice in the preceding four quarters while missing on one occasion, with the average surprise being 1.7%.
The Zacks Consensus Estimate for Marvell’s third-quarter earnings stands at 40 cents per share, indicating a year-over-year decline of 29.8%. It is estimated to report revenues of $1.4 billion, which suggests a decrease of approximately 8.9% from the year-ago quarter.
Image: Shutterstock
Zscaler (ZS) to Report Q1 Earnings: What's in the Cards?
Zscaler (ZS - Free Report) is scheduled to report first-quarter fiscal 2024 results on Nov 27 after market close.
For the first quarter, Zscaler projects total revenues between $472 million and $474 million. The Zacks Consensus Estimate is pegged at $473.4 million, suggesting growth of 33.2% from the year-ago quarter.
Zscaler anticipates non-GAAP earnings between 48 cents and 49 cents per share. The Zacks Consensus Estimate for the bottom line is pegged at 49 cents per share, indicating a whopping 69% increase from the year-ago quarter’s earnings of 29 cents.
The cloud-based security solution provider projects non-GAAP income from operations between $70 million and $72 million. The company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 21%.
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 Consider
Zscaler’s first-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 2021, 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 first-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 first-quarter sales from Channel Partners and Direct Customers is pegged at $433 million and $40.1 million, respectively. We expect the remaining performance obligation (RPO) at the end of the first quarter to be approximately $3.65 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 22.9% in non-GAAP S&M and 38.6% in non-GAAP R&D expenses in the last reported quarter. Total non-GAAP operating expenses climbed 27% 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 #4 (Sell) 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, Micron Technology (MU - Free Report) , Snowflake (SNOW - Free Report) and Marvell Technology (KEYS - Free Report) have the right combination of elements to post an earnings beat in their upcoming releases.
Micron carries a Zacks Rank #3 and has an Earnings ESP of +26.69%. The company is scheduled to report first-quarter fiscal 2024 results on Dec 20. Its earnings surpassed the Zacks Consensus Estimate twice in the trailing four quarters while missing on two occasions, the average surprise being -67.7%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Micron’s first-quarter earnings is pegged at a loss of $1.02 per share, way higher than the year-ago quarter’s loss of 4 cents. The consensus mark for revenues stands at $4.43 billion, suggesting a year-over-year increase of 8.5%.
Snowflake is slated to report third-quarter fiscal 2024 results on Nov 29. The company has a Zacks Rank #2 and an Earnings ESP of +67.33% at present. Snowflake’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 244.5%.
The Zacks Consensus Estimate for third-quarter earnings is pegged at 16 cents per share, suggesting an increase of 45.6% from the year-ago quarter’s earnings of 11 cents. Snowflake’s quarterly revenues are estimated to grow 27.6% year over year to $710.5 million.
Marvell carries a Zacks Rank #3 and has an Earnings ESP of +0.18%. The company is scheduled to report third-quarter fiscal 2024 results on Nov 30. Its earnings beat the Zacks Consensus Estimate thrice in the preceding four quarters while missing on one occasion, with the average surprise being 1.7%.
The Zacks Consensus Estimate for Marvell’s third-quarter earnings stands at 40 cents per share, indicating a year-over-year decline of 29.8%. It is estimated to report revenues of $1.4 billion, which suggests a decrease of approximately 8.9% from the year-ago quarter.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.