BTIG Research Reaffirms Neutral Rating for Zscaler (NASDAQ:ZS)

Key Points

• BTIG Research reaffirmed its Neutral rating on Zscaler, despite broader analyst optimism. The stock has a consensus “Moderate Buy” rating from 42 analysts and an average price target of $224.90.
• Zscaler’s latest quarterly results beat expectations, with EPS of $1.19 versus the $1.09 consensus and revenue of $898.19 million versus estimates of $876.96 million. Revenue increased 24.9% year over year, while fiscal 2027 guidance remained intact.
• Shares opened at $212.25, up 5.2%, amid positive sentiment around AI-driven cybersecurity demand and partnerships with IBM and Red Hat. However, insiders sold approximately $5.6 million of stock over the past 90 days, adding a potential cautionary signal.

Zscaler (NASDAQ:ZS - Get Free Report)'s stock had its "neutral" rating restated by BTIG Research in a research report issued to clients and investors on Wednesday, Benzinga reports.

Other equities analysts have also recently issued research reports about the stock. KeyCorp boosted their price target on shares of Zscaler from $185.00 to $210.00 and gave the stock an "overweight" rating in a research note on Friday, August 21st. TD Cowen reaffirmed a "buy" rating on shares of Zscaler in a research note on Wednesday. Mizuho lifted their price target on shares of Zscaler from $210.00 to $220.00 and gave the stock an "outperform" rating in a research note on Friday, September 25th. Sanford C. Bernstein upped their price objective on shares of Zscaler from $224.00 to $298.00 and gave the company an "outperform" rating in a research note on Thursday, September 17th. Finally, Needham & Company LLC boosted their price target on shares of Zscaler from $215.00 to $255.00 and gave the stock a "buy" rating in a research note on Wednesday. Thirty-four research analysts have rated the stock with a Buy rating, seven have assigned a Hold rating and one has assigned a Sell rating to the company. According to data from MarketBeat, the company presently has a consensus rating of "Moderate Buy" and an average price target of $224.90.

Zscaler Trading Up 5.2%

Shares of ZS stock opened at $212.25 on Wednesday. The company has a market capitalization of $34.61 billion, a PE ratio of -544.23, a price-to-earnings-growth ratio of 21.03 and a beta of 0.94. Zscaler has a 52-week low of $114.63 and a 52-week high of $336.99. The business's fifty day moving average is $181.94 and its 200 day moving average is $155.82. The company has a debt-to-equity ratio of 0.65, a quick ratio of 1.70 and a current ratio of 1.70.

Zscaler (NASDAQ:ZS - Get Free Report) last announced its earnings results on Thursday, September 3rd. The company reported $1.19 earnings per share for the quarter, topping analysts' consensus estimates of $1.09 by $0.10. The business had revenue of $898.19 million for the quarter, compared to analyst estimates of $876.96 million. Zscaler had a positive return on equity of 1.23% and a negative net margin of 1.88%.The company's quarterly revenue was up 24.9% compared to the same quarter last year. During the same period in the prior year, the company earned $0.89 EPS. Zscaler has set its FY 2027 guidance at 4.860-4.900 EPS and its Q1 2027 guidance at 1.150-1.160 EPS. On average, equities research analysts anticipate that Zscaler will post 0.7 EPS for the current fiscal year.

Insider Buying and Selling

In other news, CFO Kevin Rubin sold 519 shares of the business's stock in a transaction that occurred on Friday, September 25th. The stock was sold at an average price of $197.28, for a total transaction of $102,388.32. Following the transaction, the chief financial officer directly owned 42,768 shares of the company's stock, valued at approximately $8,437,271.04. The trade was a 1.20% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Robert Schlossman sold 5,394 shares of Zscaler stock in a transaction on Monday, September 21st. The shares were sold at an average price of $200.00, for a total transaction of $1,078,800.00. Following the completion of the sale, the insider owned 61,525 shares in the company, valued at approximately $12,305,000. This trade represents a 8.06% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold 29,053 shares of company stock valued at $5,610,165 over the last ninety days. Corporate insiders own 17.20% of the company's stock.

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently made changes to their positions in the company. Handelsbanken Fonder AB lifted its stake in shares of Zscaler by 89.6% in the second quarter. Handelsbanken Fonder AB now owns 60,933 shares of the company's stock worth $8,601,000 after buying an additional 28,792 shares in the last quarter. Assenagon Asset Management S.A. raised its holdings in Zscaler by 6.6% in the 2nd quarter. Assenagon Asset Management S.A. now owns 193,297 shares of the company's stock worth $27,284,000 after acquiring an additional 11,941 shares during the last quarter. Bank of America Corp DE lifted its position in Zscaler by 44.3% in the 1st quarter. Bank of America Corp DE now owns 779,245 shares of the company's stock valued at $109,320,000 after acquiring an additional 239,326 shares in the last quarter. Danica Pension Livsforsikringsaktieselskab purchased a new stake in Zscaler during the 2nd quarter valued at $11,232,000. Finally, Amundi raised its stake in shares of Zscaler by 12.8% in the second quarter. Amundi now owns 1,137,837 shares of the company's stock worth $160,606,000 after purchasing an additional 129,563 shares during the last quarter. Hedge funds and other institutional investors own 46.45% of the company's stock.

Key Stories Impacting Zscaler

Here are the key news stories impacting Zscaler this week:

• Positive Sentiment: Fiscal 2027 guidance reaffirmed: Zscaler maintained its first-quarter and full-year fiscal 2027 outlook, removing a key uncertainty for investors. Management’s guidance includes FY27 EPS of approximately $4.86–$4.90 and Q1 EPS of $1.15–$1.16. Zscaler Hosts 2026 Investor Day, Reaffirms First Quarter and Fiscal 2027 Guidance
• Positive Sentiment: AI is strengthening demand: Management said enterprises need stronger zero-trust defenses as AI agents create new attack surfaces and cyber risks. Investors viewed this as a potentially significant growth tailwind for Zscaler’s cloud security platform. Zscaler Stock Jumps as AI Drives Demand for Zero Trust Platform
• Positive Sentiment: Analyst target raised: Stifel increased its price target, citing Zscaler’s prospects in AI cybersecurity. The target revision adds to bullish sentiment surrounding the company’s growth outlook. Zscaler: Stifel hikes target on AI cybersecurity prospects
• Positive Sentiment: IBM and Red Hat collaboration: Zscaler is working with IBM and Red Hat on protection for private applications during the period between vulnerability disclosure and patch deployment, expanding its enterprise security ecosystem. Zscaler Collaborates with IBM and Red Hat
• Neutral Sentiment: One analyst retained a Buy rating but lowered conviction from an earlier stronger stance. The analyst cited roughly 25% revenue growth, improving profitability, a net-cash balance sheet and a long-term $10 billion ARR target, while highlighting valuation and execution expectations. Zscaler Analyst Rating
• Negative Sentiment: Pomerantz LLP announced an investigation into potential claims on behalf of Zscaler investors. No allegations or findings were provided, but the announcement creates a modest headline and litigation overhang. Pomerantz Investor Alert

About Zscaler

Zscaler, Inc is a cloud-based cybersecurity company that provides security services designed to help organizations connect users, applications, devices and workloads securely. Its platform is built around a zero-trust security model, which verifies access based on identity, context and policy rather than relying primarily on traditional network perimeters.

The company's offerings include Zscaler Internet Access, which helps secure internet and software-as-a-service access, and Zscaler Private Access, which provides controlled access to private applications without extending an organization's network to remote users.

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