The first full week of trading in September didn't give Zscaler (ZS -0.08%) investors much to celebrate. During the shortened trading week that followed Labor Day, Zscaler dropped about 3%. This week, however, is a very different story, thanks to a firm providing an auspicious outlook for the cybersecurity stock.
According to data provided by S&P Global Market Intelligence, Zscaler shares were up 20.7% from the end of trading last Friday through 3:37 p.m. today.
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This cybersecurity stock has more potential upside than others
Maintaining its outperform rating, Bernstein hiked its price target on Zscaler stock to $298 from $224 on Thursday morning. Based on Zscaler's closing price of $191.58 on Wednesday, the Bernstein price target implies 56% upside.
NASDAQ: ZS
Key Data Points
According to Thefly.com, Bernstein based its improved outlook on the belief that there's growing positive market sentiment toward cybersecurity stocks. In addition, Bernstein notes that cybersecurity stocks it had previously identified as "too cheap" are now reasonable valued, yet Zscaler is one option that still provides material upside.
Is Zscaler stock a buy on Bernstein's bullish new outlook?
While Bernstein sees Zscaler stock zipping higher, prospective investors need to remember that this is merely one firm's view. Wedbush, for example, revised its price target downward last week for Zscaler stock to $215 from $220. Price targets aside, Zscaler is available at a discount right now, valued at 25.8 times operating cash flow -- a discount to its five-year average multiple of 47.6. For cybersecurity investors, now might be a good time to click the buy button while the stock is hanging on the discount rack.
