Just following up on this as PM from Brittlerock pinged me (message was a bit different but appreciated).
Zscaler is a pickle, isn’t it. We now go from a company where they are “coming to us” to one where we have to figure out how to get them coming again. A company with no “real” competition to one with hard charging competition that is inferior, no doubt, but nevertheless having a bite.
Palo Alto’s business slowed to a greater extent than did Zscaler’s business. Palo Alto’s charge to the cloud is probably good for Zscaler long term as it will cause its customers to think cloud and when you think cloud Zscaler is the first place you turn to investigate alternatives. And no doubt Zscaler is better. But as we know best tech does not always win. But one has to think enough looking at the cloud and evaluating alternatives has to start things breaking Zscaler’s way again once this lull of perhaps analysis paralysis by customers end.
That’s the good stuff. Those are good reasons to invest. However, presumed characteristics of Zscaler are being challenged. No real competition and they are coming to us and we win almost every deal…
The numbers are not in line with that narrative. And even recent analyst upgrade talks about stuff competition (even though Zscaler has clearly the best stuff).
Compare that to Alteryx or Crowd (two hit stocks as well). Their numbers are “too good to be true” but yet they are true and their shares are hit as bad as Zscaler’s shares.
Alteryx “favorable competitive environment” with booming demand. Crowd is simply destroying it.
So do you go with what should be or what is? From an allocation perspective why would you not favor what is vs what you think should be (but currently is not) all things being equal?
Tinker