Zscaler Stock Jumps 5.94% on Unexpected Profit

31 Mei

Zscaler's stock surged 5.94% on an unexpected profit, following a surprise profit of $19.1 million for the quarter. The company posted a revenue of $553.2 million, up 32% from last year and topped analysts' expectations of $535.2 million. Zscaler's fourth-quarter revenue guidance was mostly in line with estimates of $567.6 million, which would be up nearly 25% from the prior-year's reported figure.

The cybersecurity industry has been in a tough spot in recent months, with profit and sales projections from competitors like Palo Alto Networks and Cloudflare dragging down stocks around the industry. Zscaler shares (ZS) were up more than 7% to $167.97 as of 11:03 a.m. ET Friday, but are still down about 24% for the year.

Cybersecurity has become more crucial in recent years amid rising online threats and a rapid rise in artificial intelligence that enable hackers to execute advanced cyberattacks. The cloud-based security solution provider expects fourth-quarter revenue to be between $565 million and $567 million, with its midpoint above market expectation of $565.1 million, according to LSEG data.

Zscaler projects (ZS) adjusted earnings per share of about 69 cents to 70 cents in the fourth quarter, compared with estimates of 68 cents. CEO Jay Chaudhry said that Zero Trust security remains a top IT priority, and an increasing number of enterprises are adopting their platform. Analysts expect budgets for cybersecurity products to rise in the second half, with some customers still waiting for the economy to improve.

The U.S. Department of State has been working with security vendors, including Zscaler, to secure its network after China-linked hackers stole tens of thousands of emails by breaching Microsoft's network last year.