Wedbush: Zscaler (ZS.US) will become the "top company" in the field of network security, raising target price to $260.

Wedbush Securities analyst Dan Ives released a research report stating that Zscaler's latest quarter performance and guidance exceeded expectations, making it a "top company worth owning" in the field of network security. Ives maintained a "hold" rating on the stock and raised the target price from $250 to $260. In a report, the analyst wrote, "Previously, Zscaler announced its performance for the second quarter of fiscal year 2024, with revenue and profit once again impressive, as the company maintained strong momentum in the zero-trust field while also maintaining impressive profit margin discipline." Ives added, "Overall, we still believe that as cloud network security accelerates over the next decade, Zscaler is a top company in this field, as this was an impressive quarter." Strong performance in the second quarter The financial report shows that Zscaler's second-quarter adjusted earnings per share were 76 cents, with revenue increasing by 35.4% year-on-year to reach $525 million, both higher than analysts' expectations of 58 cents and $506.83 million. Key revenue indicators show a 27% year-on-year growth in cumulative orders, reaching $627.6 million, and a 35% growth in deferred revenue, reaching $1.5 billion. Guidance revision Looking ahead, Zscaler raised its full-year guidance, expecting annual revenue for fiscal year 2024 to be approximately $2.118 billion to $2.122 billion, up from the previous forecast of $2.09 billion to $2.1 billion, with the consensus estimate at $2.1 billion. The expected total orders for the full year are expected to increase from the previous range of $2.52 billion to $2.56 billion to $2.55 billion to $2.57 billion. The adjusted earnings per share are currently forecasted to be $2.73 to $2.77, compared to the previous forecast of $2.45 to $2.48 and the consensus estimate of $2.48. For the third quarter, Zscaler expects adjusted earnings per share of 64 cents to 65 cents, with revenue of $534 million to $536 million; analysts expect earnings per share of 59 cents and revenue of $530.87 million.