"Zscaler's Growth So Strong, Even Their Security Can't Stop It From Breaking Through The Ceiling"

Zscaler, Inc. (ZS), a leading cloud-based security company, has shown a clearer and stronger growth path ahead, driven by its effective GTM (go-to-market) model, which has resulted in revenue growth of over 20% and significant wins in larger, high-value platform deals, as of the latest update in May. The company's Z-Flex initiative has been instrumental in catalyzing platform consolidation, leading to a boost in net retention rates and deeper customer engagement within the ecosystem, with AI security growing at an impressive rate of over 80% year-over-year and Data Security ARR reaching approximately $450 million. As a result, ZS has become an attractive investment opportunity, trading at 10x forward revenue, which is a discount compared to its peer, PANW, and offering approximately 50% upside potential, prompting the reiteration of a buy rating by the analyst, May Investing Ideas, who initially wrote about ZS with a buy rating a year prior, citing the effectiveness of the new GTM model and the resonance of ZS's platform with customers. With its strong growth trajectory and expanding product adoption, including significant advancements in AI and Data Security, ZS is well-positioned to continue delivering value to its customers and investors alike, as evidenced by its accelerating growth and increasing traction in the market. The analyst's buy rating is based on a comprehensive analysis of ZS's investment potential, taking into account its financial performance, market position, and growth prospects, as of the latest update, and is not influenced by any personal stake or compensation.