This post was originally published on this site
Wells Fargo analysts told investors in a note Friday that Zscaler (NASDAQ:ZS) is the firm’s top pick in the software infrastructure space for 2023.
The analysts explained they believe the company, which is rated at Overweight with a $160 price target, is the most resilient to the challenging macro environment.
In addition, they said it is “best-positioned to capitalize on the top growth driver of the year—Zero Trust and the Digital Transformation.”
“We believe they have a number of ways to maintain 30%+ revenue growth over the next 12 months, while modestly expanding Operating and Free Cash Flow margin, enabling the company to remain above the ‘Rule of 50,'” the analysts wrote.
“Shares of ZS declined 65% in 2022 and are now trading at just 6.5x EV/CY24E Sales (vs. peer group average of 7.4x), which we view as an attractive entry point. As such, we reiterate an OW rating and $160 PT,” they concluded.
Zscaler shares dipped 0.37% in Friday’s session.
