AI Stock Analysis: Is It Time to Invest in ZS?

June 17, 10:52 pm

Zscaler, Inc. is a global cloud-based information security company that provides internet security, web security, next-generation firewalls, sandboxing, antivirus, and vulnerability management. It's known for its robust and highly scalable software-as-a-service offerings that help organizations securely transform their networks and applications for a mobile and cloud-first world.

Price & AI Score for ZS.

Fundamental Analysis

In the most recent quarter, Zscaler reported revenue of $553 million. This represented a quarterly increase of 5.37%, implying that the company is experiencing steady growth. Year-over-year, revenue increased by 32.09%, which is an impressive sign of sustainable long-term growth.

The company's net income for the last quarter was $19 million, marking a significant quarterly increase of 167.17%. Compared to the same quarter last year, net income saw an enhancement of 141.53%, highlighting improved profitability and operational efficiency.

EBITDA for the last quarter stood at $27 million. This figure represents a monumental quarterly increase of 295.87% and an annual increase of 177.31%. The EBITDA numbers indicate Zscaler is improving its earnings before interest, taxes, depreciation, and amortization, which is a particularly strong signal for potential investors.

Despite these positive fundamentals, there has been insider selling of the company's stock in the past couple of months, which can be perceived as a bearish signal. Investors might require more context to understand the reasons behind this insider selling before making any investment decisions.

Technical Analysis

As of today, Zscaler's stock price stands at $184.38, showing a monthly increase of 3.09%. Year-over-year, the stock price has enhanced by 19.72%, indicating a positive long-term trend. The upward price movement suggests the stock is on a bullish trajectory.

The stock's 10-day Simple Moving Average (SMA10) is $184.05, slightly higher than the previous SMA10 of $183.71. This upward movement in the SMA indicates a potential rise in the stock's price.

Additionally, the stock's Relative Strength Index (RSI) is 28.6, indicating it is in an oversold condition. An RSI below 30 generally signals that the stock may be undervalued, presenting a potential buying opportunity.

Alternative Data Analysis

In terms of job postings and employee sentiment, Zscaler currently has 134 open positions according to data from prominent job boards. This is a decrease of 61% over the last few months, suggesting the company might be looking to optimize its costs or margins, which might not bode well for its growth narrative.

Zscaler’s webpage intrigues 2.5 million visitors per month, an increase of 29% over the last few months. This rise in web traffic is a positive signal that more potential customers are showing interest in Zscaler's offerings.

The company’s social media presence on Twitter shows 16,000 followers, a growth of 3% in the last few months. This can be seen as a sign of increasing interest and engagement with Zscaler among the public and industry enthusiasts.

According to AltIndex’s AI score—a tool that evaluates a company's stock price based on fundamental, technical, and alternative data—Zscaler stands at a score of 66, which is considered a buy signal.

Conclusion and Recommendation

Considering Zscaler's strong fundamentals, positive technical indicators, and favorable alternative data, the overall outlook for the stock appears bullish. The revenue growth of 32.09% year-over-year and net income growth of 141.53% indicate robust financial health and growth potential. Although insider selling is a cautious note, the RSI and other technical indicators suggest that the stock might be undervalued at its current price of $184.38.

The growth in web traffic and social media engagement, combined with a possibly undervalued stock and the AltIndex AI buy signal, further bolster the bullish outlook. Thus, based on comprehensive analysis, Zscaler is recommended as a Buy for potential investors looking for a growth-oriented tech stock.

Disclaimer: This article, generated by an experimental AI tool, is for informational purposes only and not financial advice. Information is based on publicly available data and may not always be accurate or current. Visit ZS AI Stock Analysis for a more up-to-date analysis.

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