Zscaler Positioned To Capitalize On Rising 'Zero Trust' Trend, Says Bullish Analyst

Shares of Zscaler Inc (NASDAQ:ZS) have been in focus after the company reported its fiscal third-quarter results and got its price target bumped higher by a Stifel analyst.

Zscaler has exposure to “favorable secular forces” that are fueling the adoption of “zero trust” network architectures, according to Oppenheimer.

The Zscaler Analyst: Ittai Kidron initiated coverage of Zscaler with an Outperform rating and a price target of $180.

The Zscaler Thesis: The company has a leading share in the cloud-based zero trust network architecture and its platform offers a wide range of features, “which effectively overcome multiple modern security challenges and increasing complexity,” Kidron said in the initiation note.

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Zscaler’s total addressable market (TAM) stood at $9.5 billion in 2021 and “is projected to grow at a 20.0% five-year CAGR to $23.6B in 2026,” the analyst stated. “Zscaler has a large opportunity ahead, currently capturing only 13.3% of the TAM,” he added.

The company also has “a significant up-sell opportunity with its evolving product portfolio,” Kidron further wrote in the note.

ZS Price Action: Shares of Zscaler had risen by 3.6% to $150.15 at the time of publishing Thursday.

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