How Investors Are Reacting To Zscaler (ZS) Expanding CrowdStrike AI Partnership for Unified Cloud Security

• Zscaler announced an expanded collaboration with CrowdStrike, through its subsidiary Red Canary, to integrate their AI-driven cybersecurity platforms into a unified cloud-native architecture designed to improve threat detection and operational efficiency.
• This initiative targets the growing need for secure migration from legacy systems and underscores the shift toward automated, cloud-based security operations to address evolving client requirements in enterprise cybersecurity.
• We'll now examine how Zscaler's enhanced partnership for AI-powered cybersecurity operations could reshape its broader investment narrative.

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Zscaler Investment Narrative Recap

Owning Zscaler typically means believing in the sustained need for advanced, cloud-native security as enterprises accelerate remote work and digital transformation. The recent AI-centric partnership with CrowdStrike and Red Canary could reinforce Zscaler’s leadership in integrated threat detection, but its immediate impact on the largest short-term catalyst, broadening multi-product adoption and recurring revenues, is modest. Heightened competition from larger security vendors remains the most pressing risk for now, with no material changes owing to this news event.

Among recent announcements, Zscaler’s launch of AI-powered Zero Trust solutions for IoT and OT devices stands out in the context of ongoing sector catalysts. This innovation addresses increasing demand for security coverage in industry verticals undergoing digital expansion, supporting platform adoption and reinforcing recurring revenue streams, an area to watch as integration partnerships unfold.

Yet, unlike the tailwinds from partnerships, the persistent risk of pricing pressure and lost share to larger bundled platforms is something investors should not overlook...

Read the full narrative on Zscaler (it's free!)

Zscaler is projected to reach $4.5 billion in revenue and $144.4 million in earnings by 2028. This outlook assumes a 20.6% annual revenue growth rate and an increase in earnings of $183.2 million from the current level of -$38.8 million.

Uncover how Zscaler's forecasts yield a $316.07 fair value, a 16% upside to its current price.

Exploring Other Perspectives

Fair value estimates from nine members of the Simply Wall St Community span from US$89.53 to US$324.55 per share, reflecting a considerable spread in sentiment. Many are monitoring competitive pressures, underscoring how sharply views can differ on the company's growth potential, review these diverse perspectives to inform your own outlook.

Explore 9 other fair value estimates on Zscaler - why the stock might be worth as much as 19% more than the current price!

Build Your Own Zscaler Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Zscaler research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Zscaler research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Zscaler's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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