Investing.com — Shares in Zscaler (NASDAQ:ZS) rose on Tuesday after analysts at BTIG upgraded their rating of the security software company to buy from neutral.
The analysts said they feel “confident” in Zscaler’s ability to maintain its leadership position in the face of increased competition. They also called data on the company’s new products “encouraging.”
In a note to clients, the analysts said they believe there are “large” opportunities for Zscaler in the market for “security service edge,” a type of network security service that can be delivered from a purpose-built cloud platform.
“We think [Zscaler] is sitting in front of large secular growth opportunity as network security architectures migrate towards cloud environments over the next five years,” the analysts noted.
The San Jose-based group’s new cloud-based platform for measuring the digital experiences of users could also emerge as a “more material” performance driver because it increases the bill of a typical Zscaler customer by around 50%, the analysts argued. This product, known as Zscaler Digital Experience, has been gaining momentum, they added.