Nucor earnings beat by $0.08, revenue fell short of estimates
SAN JOSE - Cybersecurity company Zscaler, Inc. (NASDAQ:ZS), which has delivered an impressive 74% return over the past six months and maintains strong gross profit margins of 77%, announced Monday its intention to offer $1.5 billion in convertible senior notes due 2028 in a private placement to qualified institutional buyers. According to InvestingPro data, the company operates with a moderate level of debt and maintains a healthy current ratio of 1.24.
The company also plans to grant initial purchasers a 13-day option to buy up to an additional $225 million in notes, according to a press release statement.
The notes will be senior unsecured obligations maturing on July 15, 2028, with interest payable semiannually. Under certain circumstances, the notes will be convertible into cash, Zscaler common stock, or a combination of both, at the company’s discretion.
Zscaler intends to use part of the proceeds to fund capped call transactions designed to reduce potential dilution to common stock upon conversion of the notes. The remainder will support general corporate purposes, including working capital, capital expenditures, and potential acquisitions.
The company expects to enter into privately negotiated capped call transactions with initial purchasers or their affiliates, covering the number of shares that will initially underlie the notes, subject to anti-dilution adjustments.
The offering is subject to market and other conditions, with no assurance regarding completion timing or final terms.
The notes and any shares issuable upon conversion have not been registered under the Securities Act and may not be offered or sold in the United States without registration or an applicable exemption from registration requirements.
In other recent news, Zscaler has been the focus of several analyst updates following its recent earnings report and strategic initiatives. UBS raised its price target for Zscaler to $365, highlighting strong platform momentum and increased confidence in the company’s growth trajectory for fiscal year 2026. Wells Fargo upgraded Zscaler’s stock rating to Overweight and increased its price target to $385, citing improvements in the company’s business and a projected 20% growth in billings by fiscal year 2026. JPMorgan also adjusted its price target to $348, reflecting a 19% increase, after positive discussions with Zscaler’s management about growth drivers such as Zero Trust Everywhere and Data Security Everywhere.
JMP Securities reiterated its Market Outperform rating with a $310 price target, emphasizing Zscaler’s consistent execution and impressive financial metrics, including 23% revenue growth in its fiscal third quarter of 2025. Cantor Fitzgerald raised its price target to $340, expecting accelerated billings in the latter half of the year due to increased adoption of cloud security and data protection solutions. These developments indicate a strong market position for Zscaler, with analysts expressing confidence in its continued growth and expansion in the cybersecurity sector.
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