By Eric J. Savitz
Zscaler shares received a boost from KeyBanc Capital analyst Eric Heath, who turned bullish on the security software company, which has been under pressure this year amid concern about decelerating growth in billings.
Heath lifted his Zscaler rating to Overweight from Equal Weight, setting a price target of $220. Zscaler shares, down about 20% year to date, edged up 1.6% to $175.68 on Thursday.
Heath said that following a survey of IT resellers, he has become "more constructive" about the outlook for the competitive landscape in SASE, or "secure access service edge," where Zscaler is a key player.
SASE, generally pronounced "sassy," refers to cloud-based services that push security barriers out to the edge of the network. That makes it more secure to connect remotely to corporate applications and data.
The analyst said his survey of IT resellers showed Zscaler as the best positioned vendor within the SASE field, which he called "a large market that remains in the early innings."
While the analyst pointed out that there are many competitors in this area, including Microsoft, Cisco Systems, Fortinet, Check Point Software Technologies, Palo Alto Networks, and Cloudflare, he said that overall, his competitive concerns are "lessening," with some of the other plays focused on other areas.
He said that the need for SASE has been underlined by a recent hack involving the virtual private networks provider Ivanti, which among other things knocked systems run by the federal Cybersecurity and Infrastructure Security Agency, or CISA, offline.
Write to Eric J. Savitz at eric.savitz@barrons.com
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(END) Dow Jones Newswires
April 18, 2024 12:31 ET (16:31 GMT)
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