Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Why Shares of Zscaler Jumped 12% in June

By Chris Neiger - Jul 10, 2019 at 12:00PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Investors were pleased to see the company deliver strong third-quarter results.

What happened

Shares of the cloud security provider Zscaler ( ZS -8.29% ) popped 11.7% in June, according to data provided by S&P Global Market Intelligence, after the company reported its fiscal third-quarter results at the very end of May.

So what

Investors were happy to see the company's sales increase 61% year over year to $79.1 million and that Zscaler's operating cash flow improved in the third quarter. Zscaler's operating cash flow grew to $13.5 million, compared to $8.1 million in the year-ago quarter.

Stock chart with the trend moving up.

Image source: Getty Images.

Investors were likely also happy with the fact that the company ended the quarter with $4.6 million in free cash flow, up from $3.7 million in the third quarter of 2018.

Zscaler's share price has been on a tear over the past year, and the company's nearly 12% boost in June helped contribute to its 122% gains over the past 12 months.

Now what

While investors had reason to be optimistic following Zscaler's third quarter, the company's management warned the current fourth quarter won't compare to 2018's fourth quarter. Zscaler CFO Remo Canessa said on the company's earnings call, "Please keep in mind that next quarter we'll have a difficult comparison with a large public sector deal that closed in Q4 2018. This deal added $16.5 million to billings and $26 million to the backlog in the July quarter, which will pose a difficult year-over-year comparison in Q4."

Despite that, the company is still forecasting revenue between $81 million and $83 million, which is a nearly 46% year-over-year increase at the midpoint. All of which means that Zscaler investors appear to have more to look forward to in the coming months.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Zscaler Stock Quote
$318.21 (-8.29%) $-28.76

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/02/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.