But one company that we love in this industry right now is a cloud-based security firm, called Zscaler. Their goal is to expand protection beyond their client’s physical locations. They have 150 data centers and claim to manage over 150 billion transactions a day and stop 7 billion security incidents.
They have been very successful in the larger enterprise market. Having over 5,000 customers, and 500 of those being in the Forbes Global 2000. They have done a great job of diversifying internationally, around half of their revenue is international. They are growing very quickly. Over 50% revenue growth y/y in the past two of quarters, 122% net dollar retention.
One of their strengths, is that the company’s upselling number is very impressive. They put their current total market to be around 335 million possible users, which would mean their yearly revenue is at around $72 billion of annual revenue. That is only including what they provide today, they say there are other opportunities they might pursue, like Internet-of-Things. Then there are B2B applications, which is a market that will get much bigger over time.
Their very engaged founder and CEO Jay Chaudhry, who is still leading the business, owns a large 20% stake, plus another 20% stake using family trusts. Meaning he is very highly invested in the company’s success.
Zscaler is not a cheap stock, being at around 40 times sales, but when you research their numbers, the company sticks out as a well justified buy for anyone wanting to profit from cybersecurity.
Author: Scott Dowdy