Is Zscaler (ZS) Stock Undervalued? KeyBanc Thinks So, Raises Target to $210
TLDR
- KeyBanc raised its Zscaler price target from $185 to $210, keeping an Overweight rating
- Channel checks were steady quarter over quarter, though qualitative feedback remains mixed
- KeyBanc flagged some deterioration in go-to-market alignment between Zscaler and CrowdStrike sellers
- Zscaler trades at a discounted valuation of 6.6x revenues versus peers at 10.7x revenues
- An analyst day in October could serve as a catalyst for improved messaging
Zscaler (ZS) climbed 2.11% on Friday after KeyBanc Capital Markets raised its price target on the stock to $210 from $185, while keeping its Overweight rating intact. The stock was trading at $178.65 at the time of writing.
Analyst Eric Heath said channel checks on Zscaler were “about steady” quarter over quarter. However, he noted that qualitative feedback on the company remains mixed, particularly around its role as a platform vendor and the competitive landscape.
One area of concern raised by Heath was a deterioration in go-to-market alignment between Zscaler and CrowdStrike sellers in the field. He noted that partners are unclear on the exact cause of this friction.
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