Zscaler (ZS) Stock Forecast & Price Target

Zscaler reported calculated billings of $743 million for the quarter, reflecting an 18% year-over-year growth that surpassed expectations, supported by a robust 25% rise in unscheduled billings, which includes upsells and renewals. The company's revenue reached $657.9 million, growing 23% year-over-year, and strong performances across various segments—particularly in Data Protection—indicate a strong demand for its cloud-native cybersecurity solutions. Additionally, ongoing enhancements to sales capacity and productivity, along with a successful go-to-market strategy, underscore Zscaler's ability to maintain momentum and confidence in achieving future growth targets.

Zscaler faces significant challenges due to higher-than-expected sales force attrition, which could disrupt its sales and renewal cycles as noted in its latest fiscal report. Furthermore, management anticipates that new product releases will negatively impact gross margins in the near term, compounding the company's financial pressures. The firm’s reliance on organizations adopting its cloud platform for future growth leaves it vulnerable to competitive pressures and a deteriorating macroeconomic environment, which may hinder its ability to meet projections and leverage operating expenses effectively.