Zscaler Inc (NASDAQ:ZS) stock rose 2.20% (As on October 10, 11:25:00 AM UTC-4, Source: Google Finance) after an upgrade from Barclays from underweight to overweight and a near-term price target set at $190 from $176. The analysts saying that the upgrade comes from the company’s growth in Secure Access Service Edge. This is a cloud security-based system that protects user information that lives outside of the data center, here. The cybersecurity platform clearly one of the reasons or really, the reason behind this bull call here from Barclays. When they are diving into some of the reasons as to why, or the growth opportunity that they do see within this business, they see the Secure Access Service Edge, here, market could be as big as network security by 2026. They also note how Zscaler is a leader within this space. When it comes to some of the numbers that Barclays expecting to see from Zscaler, they raised their full-year 2024 billings estimate. They also extended their model here for fiscal year 2026. They see billings growth of just about 20%. They also talk about the fact that they’re seeing healthy free cash flow, margin expansion there.

Further, innovative offerings such as Zero Trust workload and data protection have been key in securing the Barclays’ upgrade. These new products are expected to sustain high growth rates for Zscaler moving forward. The company’s impressive gross profit margins, standing at 77.63%, further highlight the potential of these innovative solutions. Over the past two years, Zscaler has managed to double its annual recurring revenue to over $2 billion. The company has also significantly improved its free cash flow position, increasing it from less than $100 million to $333 million. This substantial growth in free cash flow further underscores the company’s strong financial performance and its ability to generate sustainable profits. Additionally, Zscaler operates with a moderate level of debt and its liquid assets exceed short term obligations, providing further evidence of its strong financial standing.

Additionally, for the first quarter of fiscal 2024, the company expects revenue of $472 million to $474 million, Non-GAAP income from operations of $70 million to $72 million and Non-GAAP net income per share of approximately $0.48 to $0.49.

For the full year fiscal 2024, the company expects Revenue of approximately $2.050 billion to $2.065 billion, Calculated billings of $2.52 billion to $2.56 billion, Non-GAAP income from operations of $330 million to $340 million and Non-GAAP net income per share of $2.20 to $2.25.