The Ratings Game Archives | Email alerts

Jan. 14, 2020, 8:49 a.m. EST

Zscaler stock leads cybersecurity rally as most bullish analyst doubles down

Stock is up 28% on year, compared with 5.5% gain on HACK index

new
Watchlist Relevance
LEARN MORE

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

  • X
    Zscaler Inc. (ZS)
  • X
    Palo Alto Networks Inc. (PANW)
  • X
    CrowdStrike Holdings Inc. Cl A (CRWD)

or Cancel Already have a watchlist? Log In

By Wallace Witkowski, MarketWatch


Zscaler

Zscaler Inc. shares led strong gains in the cybersecurity sector Monday after the company’s most bullish analyst doubled down on his investment thesis.

Zscaler /zigman2/quotes/203585803/composite ZS +3.63%  shares rallied 8.4% to close at $59.62, following an intraday high of $59.80. Shares are up more than 28% since the beginning of 2020.

In a note Monday, Needham analyst Alex Henderson, who has a “strong buy” rating and claims the most bullish Wall Street price target of $89, said he “came away with renewed confidence” following a recent visit to the company.

“Zscaler is one of our top recommendations in Cloud Direct Zero Trust Security, which we believe is the critical requirement for future security architectures,” Henderson said. “Zscaler has the best platform for Zero Trust, integrates tightly with Cloud Direct, and is core to delivering Digital Transformation implementations, in our view.”

The analysts also played down competition in the cloud-security space from Palo Alto Networks Inc. /zigman2/quotes/207599953/composite PANW -1.74% , noting “we see no evidence of pressure from Palo Alto and strongly believe Palo’s architecture is incapable of competing with Zscaler.”

In addition to Zscaler, Henderson sees core positions in cloud-based security as being CrowdStrike Holdings Inc. /zigman2/quotes/212513426/composite CRWD +1.99% , Okta Inc. /zigman2/quotes/210420951/composite OKTA +2.54% , Cloudflare Inc. /zigman2/quotes/214109260/composite NET +4.42% , Mimecast Ltd. /zigman2/quotes/202578603/composite MIME -5.53% and Proofpoint Inc. /zigman2/quotes/207816916/composite PFPT -3.60%  .

Of the 22 analysts who cover Zscaler, 11 have buy or overweight ratings, 10 have hold ratings and one has a sell rating, along with an average price target of $62.63, according to FactSet data.

Also on Monday, Zscaler said it was a finalist in Microsoft Corp.’s /zigman2/quotes/207732364/composite MSFT -0.92%  Security 20/20 partner awards for the “ISV Partner of the Year” and “Customer Impact” categories.

Cybersecurity stocks as a whole outperformed the broader market on Monday. The ETFMG Prime Cyber Security ETF /zigman2/quotes/207892345/composite HACK -1.01%  rose 1.1%, while the S&P 500 index /zigman2/quotes/210599714/realtime SPX -1.51%  closed up 0.7%, and the tech-heavy Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP -1.53%  finished up 1%.

In fact, cybersecurity has been outperforming broader indexes for the year so far, following heightened concerns about cyberattacks from Iran following the U.S. airstrike that killed the country’s top general, Qassem Soleimani. So far in 2020, the HACK index is up 5.3%, compared with a 1.8% rise in the S&P 500 and a 3.4% advance in the Nasdaq.

/zigman2/quotes/203585803/composite
US : U.S.: Nasdaq
$ 63.40
+2.22 +3.63%
Volume: 4.14M
April 3, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$8.20 billion
Rev. per Employee
$231,369
loading...
/zigman2/quotes/207599953/composite
US : U.S.: NYSE
$ 162.66
-2.88 -1.74%
Volume: 999,919
April 3, 2020 6:30p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$16.22 billion
Rev. per Employee
$484,742
loading...
/zigman2/quotes/212513426/composite
US : U.S.: Nasdaq
$ 57.82
+1.13 +1.99%
Volume: 4.56M
April 3, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$12.33 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/210420951/composite
US : U.S.: Nasdaq
$ 118.94
+2.95 +2.54%
Volume: 2.21M
April 3, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$14.60 billion
Rev. per Employee
$255,768
loading...
/zigman2/quotes/214109260/composite
US : U.S.: NYSE
$ 24.08
+1.02 +4.42%
Volume: 1.92M
April 3, 2020 6:30p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$7.29 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/202578603/composite
US : U.S.: Nasdaq
$ 30.59
-1.79 -5.53%
Volume: 784,626
April 3, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$1.91 billion
Rev. per Employee
$269,786
loading...
/zigman2/quotes/207816916/composite
US : U.S.: Nasdaq
$ 97.89
-3.66 -3.60%
Volume: 656,468
April 3, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$5.58 billion
Rev. per Employee
$274,395
loading...
/zigman2/quotes/207732364/composite
US : U.S.: Nasdaq
$ 153.83
-1.43 -0.92%
Volume: 41.24M
April 3, 2020 4:15p
P/E Ratio
26.78
Dividend Yield
1.33%
Market Cap
$1170.04 billion
Rev. per Employee
$902,473
loading...
/zigman2/quotes/207892345/composite
US : U.S.: NYSE Arca
$ 34.37
-0.35 -1.01%
Volume: 82,456
April 3, 2020 8:00p
loading...
/zigman2/quotes/210599714/realtime
US : S&P US
2,488.65
-38.25 -1.51%
Volume: 3.59B
April 3, 2020 5:10p
loading...
/zigman2/quotes/210598365/realtime
US : U.S.: Nasdaq
7,373.08
-114.23 -1.53%
Volume: 2.88M
April 3, 2020 5:16p
loading...

Wallace Witkowski is a MarketWatch news editor in San Francisco. Follow him on Twitter @wmwitkowski.

Get news alerts on Zscaler Inc. — or create your own.
This Story has 0 Comments
Be the first to comment
More News In
Industries

Story Conversation

Commenting FAQs »
Link to MarketWatch's Slice.