Zscaler's Cybersecurity Challenges Reflect Poor Annual Revenue Forecasts

Wednesday, 4 September 2024, 04:10

Zscaler's upcoming challenges in the cybersecurity market become evident as the firm's shares tumble drastically due to lackluster annual revenue forecasts. The projected revenue range for Zscaler falls short of analyst expectations, mirroring trends in the wider cybersecurity industry. Increasing competition and shifting market dynamics are contributing factors to the firm’s struggles, making its future uncertain.
Indiatimes
Zscaler's Cybersecurity Challenges Reflect Poor Annual Revenue Forecasts

Zscaler Shares Experience Significant Decline

Zscaler shares experienced a sharp decline of 15.2% in premarket trading Wednesday, driven by the cybersecurity firm's dismal annual forecasts. As the company anticipates full-year revenue between $2.60 billion and $2.62 billion, analysts had estimated a target of $2.63 billion. This disparity has led to a potential loss of more than $4 billion from Zscaler's market valuation of $29.2 billion.

Industry Repercussions and Analyst Insights

Despite Zscaler's predictions, the cybersecurity sector shows a spectrum of forecasts. Peers like Palo Alto Networks and SentinelOne have raised their annual revenue expectations, potentially increasing competition for Zscaler. Analyst Catharine Trebnick from Rosenblatt Securities pointed out that contracted billings are anticipated to grow by 7% in 1H2025. However, this reflects a historically lower growth rate attributed to past macroeconomic challenges.

Analyst Reactions and Future Outlook

In light of the grim outlook, several brokerages, including Bernstein, who suggested a possible increase in demand owing to better sales effectiveness, have adjusted their price targets for Zscaler shares. The median price target now sits at $220, a decrease from $224 from August.


This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.


Related posts


Newsletter

Subscribe to our newsletter for the most reliable and up-to-date tech news. Stay informed and elevate your tech expertise effortlessly.

Subscribe