LAS VEGAS - Zscaler, Inc. (NASDAQ: NASDAQ:ZS), a cloud security company, announced on Tuesday an expanded collaboration with Google (NASDAQ:GOOGL) to advance Zero Trust security measures for enterprises, integrating directly with Chrome Enterprise and Google Workspace.
The partnership aims to provide enhanced threat and data protection for enterprise users, eliminating the need for traditional VPNs and additional browsers. The integration with Google Workspace is designed to prevent sensitive data leakage from applications such as Gmail and Drive.
Zscaler's Zero Trust Exchange platform is expected to benefit from the sharing of security telemetry with Google Security Operations, enabling improved security operations through cloud-based solutions.
The move comes as Zscaler's ThreatLabz 2024 VPN Risk Report revealed that over half of surveyed organizations suffered VPN-related cyberattacks in the past year, highlighting the risks associated with legacy security methods.
The collaboration offers a solution that allows secure access to private applications without remote access VPNs, addressing the cybersecurity and data loss risks associated with Bring Your Own Device (BYOD) policies. This approach reduces the reliance on virtual desktop infrastructure (VDI) products, which are often costly and complex while avoiding the need for users to switch to a different browser.
Zscaler will utilize signals from Chrome Enterprise, such as device posture, user identity, and device attributes, to enhance access control decisions and ensure that corporate access is limited to Chrome Enterprise browsers. This integration is expected to provide flexibility for employees, partners, and contractors to access applications securely from any device.
For Google Workspace, Zscaler's integration will include Data Loss Prevention (DLP) capabilities to safeguard sensitive emails and documents. The use of Google Drive Labels API will enable organizations to classify, audit, and protect files.
The collaboration also aims to empower organizations with granular cloud security insights, streamlining threat detection and response by providing actionable data within Google Security Operations.
Punit Minocha, EVP of Business and Corporate Development at Zscaler, expressed enthusiasm for partnering with Google to deliver a comprehensive Zero Trust security solution that enables secure application access without traditional VPNs.
Mayank Upadhyay, VP Engineering at Google Cloud Security, echoed this sentiment, noting the alignment with Zscaler's vision for a Zero Trust model and the benefits of providing browser-based threat and data protection through Chrome Enterprise.
This announcement is based on a press release statement from Zscaler, Inc.
In other recent news, cloud security company Zscaler has made strategic advances in AI-powered cybersecurity through a partnership with technology giant NVIDIA (NASDAQ:NVDA). This collaboration aims to bolster Zscaler's security services by integrating NVIDIA's advanced AI technologies. Recent developments also include the launch of Zscaler ZDX Copilot, a digital experience monitoring tool designed to streamline IT support and operations.
Zscaler's financial performance has also been noteworthy. The company's Q3 results exceeded expectations with a 30% year-over-year increase in billings and a record operating margin. This marked Zscaler's first instance of GAAP profitability. The company also reported a robust Dollar-Based Net Retention rate and a 31% year-over-year growth in customers with an annual recurring revenue of over $1 million.
Several analyst notes followed Zscaler's Q3 report. Canaccord Genuity adjusted its price target for Zscaler to $220, maintaining a Buy rating. Evercore ISI also adjusted the price target for Zscaler shares to $245. TD Cowen maintained a Buy rating on Zscaler shares, with a steady price target of $270.00, highlighting the company's 32% revenue growth. Oppenheimer adjusted its outlook on Zscaler, reducing the price target to $260.
InvestingPro Insights
As Zscaler, Inc. (NASDAQ: ZS) fortifies its partnership with Google, its financial and market metrics depict a company that's navigating the competitive cloud security landscape with notable strategic moves. The company's market capitalization stands at a robust $27.8 billion, underlining its significant presence in the industry. Despite operating at a loss with a negative P/E ratio of -371.71, Zscaler's gross profit margin impressively reaches 77.94% for the last twelve months as of Q3 2024, indicating strong operational efficiency and a solid foundation for future profitability.
Zscaler's revenue growth further accentuates this point, with a substantial increase of 37.16% over the last twelve months as of Q3 2024. This growth trajectory is aligned with the InvestingPro Tips that point to expected net income growth and anticipated sales growth in the current year. With 34 analysts revising their earnings upwards for the upcoming period, it suggests a consensus optimism about the company's financial prospects and its strategic direction, including its recent collaboration with Google.
Investors may also take comfort in Zscaler's liquidity position, as its liquid assets exceed short-term obligations, enabling the company to navigate the dynamic market conditions with resilience. While Zscaler is trading at high revenue and Price / Book valuation multiples of 25.43, reflecting a premium market sentiment, the company's significant return over the last week of 8.73% showcases its recent favorable performance in the stock market.
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