In San Jose, California, Zscaler is making waves in the cloud security market with its innovative Zero Trust platform. The company, listed on the NASDAQ as ZS, offers a range of services catering to users, workloads, and cloud, as well as IoT/OT. With its disruptive Zero Trust platform, Zscaler is poised to challenge the traditional legacy firewall+VPN structure and maintain a robust revenue growth of over 30%.

Zscaler’s Zero Trust platform encompasses various core products such as Zscaler for Users, Zscaler for Workloads, and Zscaler for IoT/OT. These products empower enterprise clients in their cloud migration and digital transformation initiatives. By processing over 400 billion transactions by Q3 FY24, Zscaler’s Zero Trust Exchange stands out for its ability to enforce policies, manage risks, provide application policies, and identity controls, revolutionizing the cybersecurity landscape.

One of the key strengths of Zscaler’s Zero Trust platform lies in its ability to provide an integrated solution for securing all network and cloud traffic on a unified platform. By simplifying security management for enterprises and enabling remote management of users, devices, and applications from any location, Zscaler offers an ideal solution for addressing the complexities of multi-cloud environments and network access challenges.

Furthermore, Zscaler has seen significant growth in large deals and bundles, driving margin expansion and increased billings. By expanding its product offerings across users, IoT, cloud, AI, and workloads, Zscaler has enhanced its sales capabilities, securing larger deals with comprehensive product bundles. This strategic approach has led to a notable increase in operating margin, from 9.5% in Q3 FY22 to 22% in Q3 FY24.

Looking ahead to FY25, Zscaler is positioned to sustain its growth momentum, with a forecasted revenue growth of over 30%. The company’s strong billings growth, driven by winning large deals and expanding bundle sales, indicates a promising outlook for future quarters. As Zscaler continues to innovate and introduce new products, its total addressable market is expanding, allowing for continued growth and market disruption.

In terms of valuation, Zscaler’s trajectory suggests a steady revenue growth rate, with potential revenue growth of 25% in FY28, 20% in FY30, and stabilization at 15% from FY32 onwards. The company’s operational efficiency, as seen in the improved operating margin, positions it for sustainable growth in the coming years. With a calculated one-year price target of $230 per share, Zscaler is a compelling investment opportunity in the evolving cloud security market.

However, Zscaler faces key risks such as high stock options allocation and competition from industry giants like Microsoft. Despite these challenges, Zscaler’s innovative approach, strong growth prospects, and market positioning make it a standout player in the cybersecurity sector. As investors look to capitalize on the growing demand for cloud security solutions, Zscaler remains a company to watch for its disruptive technology and sustainable growth potential.