First off, I hope Saul doesn’t mind a bit of the off topic posts these days. It’s a bit therapeutic to listen/hear stories from other like and perhaps not like minded Saulinians. I know I could hear from other posters in other boards, but I don’t want to just hear from Motley colleagues ---- I want to hear from Saulinians. I’m now down for the year, but I’ve done well throughout my investment career. The stock market doesn’t go up in a straight or in a slightly noisy line ---- although investors that are newer over the last 10 years may think it does. We need dips like this to be able to be entitled to win over the longer term. But I get it, it’s tough in the short term.
Anyway, back to the matter at hand. Picking great stocks! ZS is one of them. But we know that! I thought a newer author on SA did a good job telling the ZS story ---- Niki Schranz. Most on SA speak to ZA’s “rich” pricing. I get frustrated on that. Niki speaks to richness in valuation but he gets the bigger picture re: ZS. Here’s his article. https://seekingalpha.com/article/4229268-zscaler-miss-valuat…
One quick snippet from his article that I thought I’d call out. General Electric. If we really are headed to a recession in the US (I believe the verdict is still out on that), ZS will win. Remember, there’s not a Capital investment to transition from legacy security to ZS cloud security. You can just implement it and start saving on those high cost MPLS/traditional network topologies.
Let’s look at a short real-life example of how this has actually worked out for a Zscaler customer. General Electric (GE) had a very challenging problem: Over their 125-year company history, they have grown into over 180 countries, over 4,000 locations with more than 425,000 users. At the same time, their IT-network has been growing – a lot – and with that, complexity was increasing constantly. According to Chris Drumgoole, CTO of GE, in such an environment “the drawing of the network never gets simpler and the performance never gets better and the cost never goes down.“ Since GE saw that they can’t really secure their network, they can’t afford their network and they can’t scale their network, it started to dawn on them that they actually can’t trust their network, which made it necessary to rethink basically everything. Long story short, they went ahead to remodel their legacy IT network, and Zscaler was an important partner in that process. What was the end result? GE had saved $30 million annually, increased capacity by 35% and improved latency by 80%.
All the best fellow Saulinians!