Cybersecurity company Zscaler Inc (NASDAQ:ZS) is considered a "Top Pick on the Zacks Analyst Blog."

It's also a leader in the SASE (Secure Access Service Edge) market, which is still in its "early innings," according to KeyBanc Capital Markets analyst Eric Heath.

The Zscaler Analyst: Heath upgraded the rating for Zscaler to Overweight, while establishing a price target of $220.

The Zscaler Thesis: The new price target reflects a "modest premium" to the over 20% growth group, Heath said in the upgrade note.

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The analyst mentioned four reasons for the upgrade:

• While the landscape remains competitive, concerns are easing.

• The are catalysts to SASE adoption in the near term. "The Ivanti VPN vulnerability exploits, SASE tied #4 priority in our 1Q24 VAR survey (vs. #10 last quarter), and ongoing weakness in firewall suggests network security budgets may orient toward SASE."

• The channel and survey feedback during the first quarter has been positive.

• The stock is currently trading in-line with the over 20% growth group versus its historical two-year premium.

ZS Price Action: Shares of Zscaler had risen by 2.23% to $176.81 at the time of publication on Thursday.