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SAN JOSE, Calif. - Zscaler, Inc. (NASDAQ: ZS), a cloud security company with a market capitalization of $39.82 billion, has announced its plans to acquire Red Canary, a leader in Managed Detection and Response (MDR). The acquisition, expected to close in August 2025, aims to enhance Zscaler’s security operations with Red Canary’s expertise and technology. According to InvestingPro data, Zscaler maintains a strong financial position with more cash than debt on its balance sheet.
Red Canary has been recognized for its ability to accelerate threat investigation with high accuracy, boasting a significant customer base and a track record of innovation in MDR. Zscaler intends to integrate Red Canary’s capabilities with its own AI-driven workflows and global intelligence from its ThreatLabz Security Research team. This move is designed to create a unified Security Operations Center (SOC) that leverages both AI and human expertise.
Jay Chaudhry, CEO, Chairman, and Founder of Zscaler, stated that the acquisition is a strategic expansion of their capabilities into MDR and threat intelligence. Chaudhry highlighted the synergy between Zscaler’s AI-powered risk management services and Red Canary’s threat detection and response expertise.
Zscaler has a history of over 15 years in cloud security, protecting a significant portion of Fortune 500 companies and processing vast amounts of security data. The company’s Zero Trust platform and AI-powered security operations have been central to its market position, helping drive impressive gross profit margins of 77.86% and robust revenue growth of 27.77% over the last twelve months. InvestingPro analysis reveals 13 additional key insights about Zscaler’s performance and potential.
On the other hand, Red Canary has been consistently recognized by industry analysts for its leadership in MDR. Brian Beyer, CEO of Red Canary, expressed enthusiasm for the acquisition, noting that joining forces with Zscaler will enhance their capabilities to address the evolving threat landscape.
The acquisition is subject to customary closing conditions, including regulatory approvals. Both companies have emphasized their commitment to delivering quality outcomes for their customers through the integration of their technologies and expertise.
This strategic move is set to redefine how businesses detect, respond to, and mitigate cyber threats, combining Zscaler’s global scale and data with Red Canary’s domain expertise. Trading near its 52-week high of $255.87, Zscaler’s stock currently appears to be trading above its Fair Value based on InvestingPro analysis, with the company scheduled to report its next earnings on May 29, 2025. The announcement is based on a press release statement from Zscaler, Inc.
In other recent news, Zscaler has been the focus of several analyst updates and strategic developments. Cantor Fitzgerald raised its price target for Zscaler shares to $275, maintaining an Overweight rating, citing confidence in the company’s growth potential in the Secure Access Service Edge (SASE) market. Jefferies also increased its price target to $295, with a Buy rating, expecting Zscaler to exceed its third fiscal quarter billings guidance and achieve significant revenue growth by 2026. KeyBanc Capital Markets followed suit, lifting its target to $290 while keeping an Overweight rating, acknowledging Zscaler’s market leadership and potential for improved go-to-market execution.
Loop Capital, however, set a price target of $250 and maintained a Hold rating, noting mixed findings on Zscaler’s renewal pressures but recognizing improvements in sales productivity. In a strategic move, Zscaler appointed Raj Judge to its Board of Directors and as Executive Vice President of Corporate Strategy and Ventures, aiming to leverage his experience to drive growth strategies and investment initiatives. These developments underscore the company’s ongoing efforts to strengthen its market position and financial performance. Zscaler is set to report its fiscal third-quarter results on May 29th, with investors closely watching for updates on its billing prospects and strategic initiatives.
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