03:09 PM EST, 12/03/2024 (MT Newswires) -- Zscaler ( ZS ) delivered solid fiscal Q1 results underpinned by increase in customer commitments and the momentum around artificial intelligence products, among other things, RBC Capital Markets said.

And while the company's upbeat fiscal 2025 guidance indicates 21.5% growth in revenue and 19.6% growth in billings, further upside to mid 20% seems likely, the firm said in a note sent Tuesday.

RBC said Zscaler's ( ZS ) emerging products, which include ZDX, Workload Protection, the branch solution, and AI-related products, are growing twice as fast as core products.

"Emerging products helped drive upside in the quarter. Management expects mid-20s contribution to upsell from emerging products this year, and it contributed more than this in Q1," RBC said.

RBC reiterated its outperform rating on the stock with a $230 price target, encouraged by revenue and billings growth potential and expanding margins.

Zscaler ( ZS ) stock was down nearly 5% in recent trading.

Price: 198.25, Change: -10.26, Percent Change: -4.92