Zscaler Operating Well But Diluting Too Much
Jun 3, 2024
Zscaler's Q3 shows a firm continuing to operate well, with 32% revenue growth, 30%+ forward growth metrics, improved margins, and a stable balance sheet. The firm continues to be a leader in "zero trust" security access service edge (SASE) cybersecurity offerings. My one gripe is continued rapid share growth, with diluted shares increasing another 6% over last year. Incorporating the latest results and updating the model, the previous fair value looked a bit high and I'm reducing it to $151.
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vs. Fair Value Estimates