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Zscaler - AI Stock Analysis

Analysis generated May 19, 2025

Zscaler, Inc. is a global cybersecurity leader, enabling the world's leading organizations to securely transform their networks and applications for a mobile and cloud-first world. Zscaler acts as a virtual security checkpoint for network traffic, providing a secure space for businesses to operate, while maintaining a highly integrated and easy-to-deploy infrastructure. The company offers a cloud-based service model, which avoids the limitations associated with legacy security solutions.

Fundamental Analysis

Recent performance indicators provide a mixed yet predominantly positive picture for Zscaler. Revenue for the last quarter came in at $648 million. This represents a 3.18% growth compared to the preceding quarter and a robust 23.41% growth year-over-year. Such incremental revenue growth underscores that Zscaler continues to capture market share and underscores the fundamental growth potential.

The company’s net income for the last quarter stood at $7.7 million, marking a 35.91% increase from the previous quarter and a substantial 72.87% year-over-year growth. This improvement in net income suggests that the company is efficiently balancing growth with profitability, a salient metric for long-term investors.

Conversely, the EBITDA for the last quarter was $14 million, reflecting a 44.44% decrease from the preceding quarter but a dramatic 650.44% increase year-over-year. While the short-term decline raises questions about operational efficiency, the yearly growth suggests that the long-term trajectory remains robust.

However, it is worth noting that company insiders have been selling their stock in the past couple of months. Insiders selling stocks can be perceived as a bearish signal, suggesting that those with close insights into company operations possibly have a less optimistic outlook on short-term performance.

Technical Analysis

As of today, Zscaler's stock price is $252.57. This reflects a 25.60% increase from a month ago, indicating a strong short-term uptrend. Over the longer term, the stock price has increased by 39.85% year-over-year, supporting the narrative of sustained bullish momentum.

The current Simple Moving Average (SMA10) of $245.00, which is higher than the previous SMA10 of $243.05, further underscores this upward trend. The Relative Strength Index (RSI) currently stands at 35, indicating a neutral condition. However, a neutral RSI position provides room for further upward movement before reaching overbought territory, presenting a moderate bullish outlook.

Alternative Data Analysis

Looking at job postings and employee sentiment, Zscaler has 303 open positions, a significant 183% increase over the last couple of months. This sharp rise suggests an aggressive growth strategy, likely indicative of expanding operations and increasing demand for their cybersecurity solutions.

Employee sentiment within Zscaler is neutral, suggesting no drastic shifts in internal perspectives on the company's trajectory. Additionally, Zscaler's online presence encompasses an estimated 2.8 million visitors to their webpage without significant changes in recent months, indicating steady customer interest.

Furthermore, on social media, Zscaler has 16,000 Twitter followers, also showing no meaningful variations in the last couple of months. Finally, according to AltIndex's AI score, which integrates fundamental, technical, and alternative data, Zscaler has a score of 61, delineating it as a buy signal.

Conclusion and Recommendation

Zscaler demonstrates a strong growth trajectory, bolstered by significant revenue and net income increases. While there are some short-term concerns noted through declining EBITDA and insider stock sales, the overall positive trends in revenue, net income, and long-term stock price serve to offset these concerns. The significant increase in job postings highlights the company's commitment to expansion, while a neutral RSI offers room for continued upward movement in stock price.

Based on the comprehensive analysis of Zscaler's fundamental, technical, and alternative data metrics, the recommendation is to consider Zscaler as a potential buy. The ongoing bullish trends and strategic growth initiatives provide an optimistic outlook for the stock.

Disclaimer: This AI stock analysis, 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.