Analyst Note
| Malik Ahmed Khan |We are maintaining our $170 fair value estimate for narrow-moat Zscaler after the firm reported strong third-quarter results that were in line with the preliminary results the firm put out a few weeks ago. We continue to be impressed by Zscaler's continued ability to land and expand its client base despite ongoing macro-induced client spend optimization. We attribute this success to not only strong execution from Zscaler's side but also the stickiness of Zscaler's solutions, which are hard to rip out despite customers seeking to cut IT spend in light of macro uncertainty. The firm's shares traded slightly down after the earnings report after climbing almost 50% since the preliminary report in early May. Despite the valuation uplift over the last few weeks, we continue to view Zscaler as attractively priced for long-term investors seeking high-quality cybersecurity exposure.