Investing.com – Zscaler (NASDAQ:) is a “next generation” cybersecurity company that JPMorgan analysts say is well positioned for future growth in the second half of its upcoming fiscal year 2025.
In announcing the group’s rating upgrade from Neutral to Outperform, analysts added that its shares trade at a discount to its “high growth” peers and historical valuation levels.
“Investors have recently become more concerned about competition in [Zscaler]Russian markets, the impact of complex macros on execution and loss of talent due to recent changes in sales management. However, recent fundamentals and conversations with peers and partners at recent industry events (including RSA and Zenith Live) have helped us develop a more constructive view,” the analysts wrote.
They argue that Zscaler’s “scale and architecture” allow it to compete with emerging peers in the cybersecurity market, which they estimate is worth $96 billion.
The firm, which in May forecast fourth-quarter revenue and earnings above Wall Street expectations, has benefited from increased enterprise spending on digital security at a time of rising online threats and booming enthusiasm for artificial intelligence.