Zscaler Can't Live Up to Hype

And, Shein's confidential IPO filing.

November 28, 2023

Today is Tuesday, November 28, 2023.

The Early Bird Index today is 60.78.

New to this newsletter? Sign up here

Zscaler Can't Live Up to Hype

Despite posting better-than-expected financial earnings results, cloud security company Zscaler (Nasdaq: ZS) dropped by 6.99% in after-hours trading on Monday.

Financials: Zscaler reported earnings of 67 cents per share in the past quarter and revenue of $496.7 million; both were better than expected.

Details: Zscaler dominated the quarter. Revenue jumped 40% and free cash flow expanded.

Yes, But: The company expects revenue in the current quarter to hit $505 million to $507 million. While this is an increase in overall revenue, it is also a decline in revenue growth.

Background: It’s been a great year for Zscaler and a bad year for companies getting hit with data breaches. As data breaches skyrocketed, sales for Zscaler increased. It’s a fear-based business.

Stock Price: Zscaler is up 74% this year, and hit a 52-week high on Monday.

Final Thoughts: Investors packed a lot of hype into Zscaler in 2023, and the results fell short of expectations. Keep an eye on results from fellow cybersecurity company CrowdStrike (Nasdaq: CRWD) today.

Hal9 (Sponsored)

Chat with your enterprise databases using secure generative AI and empower business users in your team to do their own data analyses in seconds.

Notables

Notable Earnings Today: CrowdStrike (Nasdaq: CRWD), Workday (WDAY), Intuit (Nasdaq: INTU), Pinduoduo (Nasdaq: PDD), Hewlett Packard Enterprise (NYSE: HPE), Splunk (Nasdaq: SPLK), Leslie's (Nasdaq: LESL), NetApp (Nasdaq: NTAP), Alarum Technologies (Nasdaq: ALAR), Nano-X Imaging (Nasdaq: NNOX), Elbit Systems (Nasadq: ESLT), Uxin (Nasdaq: UXIN), AZEK (NYSE: AZEK) Canaan (Nasdaq: CAN), Tuya (NYSE: TUYA), Mytheresa (NYSE: MYTE), Coolco (NYSE: CLCO), Scotiabank (TSE: BNS).

Notable IPOs Today: N/A.

Notable Equity Crowdfunding Campaigns Ending Today: N/A.

Notable Economic Events Today: S&P/CS HPI Composite - 20 n.s.a. (9:00 a.m. ET), CB Consumer Confidence (10:00 a.m. ET), API Weekly Crude Oil Stock (4:30 p.m. ET).

Shein's Confidential IPO Filing

It appears that the first big initial public offering of 2024 is in sight.

Details: The Wall Street Journal reported on Monday that the China-based online fashion company Shein filed for a confidential IPO, with plans to go public in the U.S. in 2024.

Definition: Obviously, a confidential IPO is a private filing. As the IPO date gets closer, the filing becomes public.

Background: Founded in 2008, Shein is the world’s largest fashion retailer. The company is known for…well, cheap clothing. Shein was valued at $66 billion last year. If it goes public, it could be one of the largest IPOs of 2024.

Also: The IPO market has been ridiculously slow for the last two years. Investors are hungry for more big IPOs.

Final Thoughts: Shein isn’t the only major IPO to watch out for in 2024 (cough, cough, Reddit).

Crypto dydx Drops Due to Supply

The cryptocurrency dydx decreased in value by about 5% on Monday because of a higher supply of the coin due to token unlocks.

Definition: A token unlock is when new coins that were hidden get released.

Final Thoughts: The price of dydx has more than tripled since the start of 2023.

Pouring Cash Into Crypto Funds: Bitcoin ETF Hope Pushes Crypto Fund Investments to $1.5 Billion (Decrypt)

Thank you for reading!

Forward to a friend and tell them to sign up here.

Want more investing tips? Listen to the podcast.

Show Your Support: Buy Me a Coffee.

Questions or comments? Hit reply to reach out.