Zscaler stock plunged Friday even though its fiscal first-quarter earnings, revenue and billings topped Wall Street targets. Zscaler dropped as analysts mulled the overall size of its billings beat and outlook.
ZS stock plunged 11.2% to 128.25 in afternoon trading on the stock market today. The cybersecurity firm reported earnings after the market close on Thursday.
For the quarter ending Oct. 31, Zscaler earnings were 29 cents a share on an adjusted basis, up 107% from a year earlier. Revenue rose 54% to $355.5 million, the San Jose, Calif-based company said.
Analysts expected Zscaler earnings of 26 cents per share on sales of $340.7 million. Also, billings rose 37% to $340.1 million, compared with estimates for $333.7 million.
"Calculated billings growth was 37% vs. the seasonally strong fourth quarter at 57% and beat consensus by 2.1% vs. 11.4% last quarter," RBC Capital analyst Matthew Hedberg said in a note to clients.
ZS Stock: Outlook Tops Estimates
For the current quarter ending in January, Zscaler said it expects earnings of 29 cents to 30 cents versus estimates for 26 cents a share.
Also, Zscaler forecast revenue of $365 million at the midpoint of guidance. Analysts had predicted revenue of $355.3 million.
Management raised the low-end of the fiscal 2023 billings guidance, but left the high-end unchanged. Zscaler expects full-year billings in a range of $1.93 billion to $1.94 billion. Analysts predicted $1.931 billion and the company's prior outlook was $1.92 billion to $1.94 billion.
Zscaler Stock Was Rocked In 2022
Prior to the Zscaler earnings release, the cybersecurity stock had retreated 56% thus far in 2022.
Heading into the Zscaler earnings report, the company owned a Relative Strength Rating of 21 out of a best-possible 99, according to IBD Stock Checkup.
In addition, Zscaler provides cloud-based cybersecurity services via 150 data centers worldwide
Zscaler's web security gateways inspect customers' data traffic for malware. Further, the Zscaler Private Access, or ZPA cloud service, replaces virtual private networks, or VPNs, to support remote work. ZS stock is one of many cybersecurity stocks to monitor.
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