Zscaler's (ZS) Avalor Buyout Redefines IT Security Landscape

Zscaler, Inc. ZS, a pioneer in cloud security, has announced a groundbreaking advancement in artificial intelligence (AI) innovations through its acquisition of Avalor. This move underscores ZS' commitment to fortifying its platform with cutting-edge capabilities.

Avalor Strengthens Zscaler’s Capabilities

The acquisition expands ZS' Zero Trust Exchange data, incorporating more than 150 pre-built integrations to empower customers in proactively identifying and predicting critical vulnerabilities while enhancing operational efficiencies. Leveraging its vast data foundation, the company aims to redefine AI capabilities in the cybersecurity realm, enabling organizations to mitigate risks and optimize performance with zero-touch operations.

The integration of Avalor's Data Fabric for Security with Zscaler's platform marks a significant milestone in cybersecurity evolution. By ingesting, normalizing and unifying data across enterprise security and business systems, ZS provides actionable insights, analytics and operational efficiencies. This collaboration empowers enterprises to automate AI-driven analytics and decision-making in real-time, streamlining reporting, incident mitigation and advanced threat detection within the Zscaler cloud security platform.

Zscaler, Inc. Price and Consensus

Zscaler, Inc. Price and Consensus

Zscaler, Inc. price-consensus-chart | Zscaler, Inc. Quote

Jay Chaudhry, CEO, chairman and founder of Zscaler, emphasizes the critical role of data in driving effective AI solutions. With the Avalor acquisition, the company enhances its ability to identify vulnerabilities, predict breaches and deliver unparalleled security outcomes.

The acquisition, predominantly in cash with a portion in equity, underscores Zscaler's commitment to advancing AI-driven cybersecurity. With this acquisition, ZS solidifies its position as a leader in revolutionizing cybersecurity through innovative AI technologies.

Growing Through Acquisitions

Zscaler has made strategic acquisitions to boost growth. Avalor’s buyout marks ZS' third strategic move following its acquisitions of Canonic and Trustdome.

The company acquired Canonic Security in February 2023, which focuses on protecting against attacks that target software-as-a-service. The company purchased Trustdome in April 2021, which helped Zscaler provide a comprehensive solution for reducing public cloud attack surfaces and improving security posture.

ZS’ other notable acquisitions include the buyout of ShiftRight in September 2022, which boosts its cloud security offerings. In May 2021, the company acquired Smokescreen, which enhanced Zscaler’s Zero Trust Exchange and Advanced Active Defense capabilities.

In May 2020, the company acquired Edgewise, which focuses on securing communications among applications running in cloud and data center networks. In April 2020, Zscaler bought a Cloud Security Posture Management company Cloudneeti.

With a robust track record dating back to its founding in 2007, Zscaler's expansion efforts underscore its position as a frontrunner in the cybersecurity landscape, boasting a market cap of approximately $30 billion. We believe these acquisitions have not only strengthened the data-protection capabilities of Zscaler but have expanded its customer base as well.

Zacks Rank & Other Stocks to Consider

Currently, Zscaler carries a Zacks Rank #2 (Buy). Shares of ZS have lost 10.2% year to date (YTD).

Some other top-ranked stocks from the broader technology sector are NVIDIA Corporation NVDA, Meta Platforms META and Amazon.com AMZN. NVIDIA and Meta sport a Zacks Rank #1 (Strong Buy) each, while Amazon carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for NVIDIA’s fiscal 2025 earnings has been revised 15.3% upward to $23.22 per share in the past 30 days, which suggests growth of 79.2% from the year-ago reported figure. The long-term estimated earnings growth rate for the stock is 29.7%. Shares of NVDA have surged 77.6% YTD.

The consensus mark for Meta’s 2024 earnings has been revised upward by 12 cents to $19.94 per share over the past 30 days, which indicates a 34.1% increase from 2023. It has a long-term earnings growth expectation of 19.5%. META stock has jumped 39% YTD.

The Zacks Consensus Estimate for Amazon’s 2024 earnings has been revised upward by 2 cents to $4.08 per share in the past seven days, which implies an increase of 40.7% on a year-over-year basis. The long-term expected earnings growth rate for the stock is 28.1%. AMZN stock has returned 17.7% YTD.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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