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 financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
