Should Zscaler Get More Credit For Its Q4 Results?

When Zscaler Inc. (NASDAQ: ZS) released its fiscal fourth-quarter financial results after markets closed on Wednesday, the firm said that it had a $0.05 in earnings per share (EPS) and $125.9 million in revenue. That topped consensus estimates of $0.03 in EPS and $118.55 million in revenue, as well as $0.07 in EPS and $86.11 million in revenue posted in the same period last year.

For the most recent quarter, deferred revenue increased 47% year over year to $369.8 million, while calculated billings grew 55% to $194.9 million.

Cash provided by operations totaled $79.3 million during this quarter, compared to $58.0 million in the same period from last year. Free cash flow was $27.5 million, versus $29.3 million in the same period last year

On the books, cash, cash equivalents, and short-term investments totaled $1.37 billion at the end of the quarter, versus $364.6 million at the end of the previous fiscal year.

Looking ahead to the fiscal first quarter, the company expects to see EPS in the range of $0.05 to $0.06 and total revenue of $131 million to $133 million. Consensus estimates call for $0.03 in EPS and $126.65 million in revenue for the quarter.

Management noted that businesses are digitally transforming at a pace never seen before, and this is fueling adoption of the Zscaler Zero Trust Exchange platform and the company’s strong fourth-quarter and fiscal year results. In the new work-from-anywhere economy, where legacy network and security are inhibitors, organizations are turning to the Zero Trust Exchange for the right architecture to enable success and create competitive advantage in this cloud and mobile world.

Zscaler stock closed Wednesday at $134.19, with a 52-week range of $35.00 to $163.80. The consensus analyst price target is $121.18. Following the announcement, the stock was down 3% at $129.74 in the after-hours session.