Why Zscaler’s Impressive Bottom-Line Beat Couldn’t Carry the Stock
Zscaler stock surged after it released better than expected fiscal second-quarter financial results.
When Zscaler Inc. (NASDAQ: ZS | ZS Price Prediction) released its fiscal second-quarter financial results after the markets closed on Tuesday, the firm said that it had a $0.09 in earnings per share (EPS) and $101.3 million in revenue. That compared with consensus estimates of $0.03 in EPS and $98.97 million in revenue, as well as $0.09 in EPS and $74.3 million in revenue posted in the same period of last year.
For the most recent quarter, deferred revenue increased 36% year over year to $280.0 million, while calculated billings grew 18% to $135.4 million.
Looking ahead to the fiscal third quarter, the company expects to see EPS in the range of $0.01 to $0.03 and total revenue of $105 million to $107 million. Consensus estimates call for $0.04 in EPS and $104.6 million in revenue for the quarter.
As for the 2020 fiscal full year, the firm expects to see earnings of $0.14 to $0.16 per share and total revenue between $414 million and $417 million. The consensus estimates are $0.15 in EPS and $410.38 million in revenue.
Jay Chaudhry, board chair and chief executive of Zscaler, commented:
In the quarter, we delivered strong earnings results while making tremendous progress on our go-to-market initiatives. Momentum is continuing to build across our business as our customers embrace and accelerate their cloud transformation.
[nativounit]
Zscaler stock traded down more than 15% Friday to $55.03, in a 52-week range of $40.05 to $89.54. The consensus price target is $62.63.
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Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics. Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications. A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.
