Key facts
- Guggenheim upgraded Zscaler (ZS) to Buy from Neutral.
- Guggenheim set a $214 price target for Zscaler.
- Zscaler's stock price was around $139.73 at the time of the upgrade.
- The upgrade follows Zscaler's Q3 earnings report and guidance.
- Zscaler projected FY2027 revenue and ARR growth of 16-17%, below expectations of ~19%.
- Guggenheim cited a pipeline rich with large deals and sees the stock near intrinsic value.
Guggenheim's upgrade of Zscaler to 'Buy' suggests a positive outlook on the cybersecurity firm's future prospects, despite recent conservative guidance. The firm's analysis of Zscaler's pipeline and its position in the SASE and SSE markets indicates potential for significant growth and a belief that the stock is currently undervalued. This contrasts with some other analysts who have lowered their price targets following Zscaler's earnings report.