Shares of Zscaler Inc (NASDAQ: ZS) opened about 10% down on Friday after the cybersecurity company issued conservative guidance citing headwinds, including longer sales cycles.
For the second financial quarter, Zscaler now forecasts about 30 cents of adjusted EPS on up to $366 million in revenue. In comparison, analysts had called for 26 cents and $325.1 million, respectively.
The cloud company expects $1.93 billion worth of billings this year – in line with estimates. On the earnings call, CFO Remo Canessa said:
In this environment, we think it’s prudent to expect a higher level of review and scrutiny by our customers to continue.
For the year, Zscaler stock is down more than 55% as higher rates continued to weigh on cybersecurity stocks.
Zscaler ended the quarter with roughly $1.82 billion in cash, equivalents, and short-term investments. In the earnings press release, CEO Jay Chaudhry said:
Customers are engaging with us to embrace zero trust architecture, eliminate point products, simplify IT and standardise on the Zscaler platform, all of which delivers better security and lower cost.
Nonetheless, Wall Street currently has a consensus “overweight” rating on Zscaler stock despite a slowdown in IT spend. Earlier this week, peer CrowdStrike also reported its quarterly results that Invezz published here.
The post Zscaler stock opened 10% down on Friday: how come? appeared first on Invezz.