Morgan Stanley Issues Positive Forecast for Zscaler (NASDAQ:ZS) Stock Price

Key Points

• Morgan Stanley raised Zscaler’s price target from $165 to $185 but maintained an “equal weight” rating, implying about 12.8% downside from the prior close of $212.25.
• Analyst sentiment is more positive overall: 34 analysts rate the stock a Buy, seven recommend Hold and one recommends Sell, producing a “Moderate Buy” consensus with a $224.90 target price.
• Zscaler exceeded quarterly expectations, reporting $1.19 in EPS versus the $1.09 consensus and $898.19 million in revenue, up 24.9% year over year and above estimates.

Zscaler (NASDAQ:ZS - Get Free Report) had its target price upped by stock analysts at Morgan Stanley from $165.00 to $185.00 in a research report issued on Wednesday, Benzinga reports. The brokerage presently has an "equal weight" rating on the stock. Morgan Stanley's price target points to a potential downside of 12.84% from the stock's previous close.

Several other equities analysts also recently commented on the company. JPMorgan Chase & Co. increased their price target on Zscaler from $205.00 to $215.00 and gave the company an "overweight" rating in a report on Wednesday, August 26th. Deutsche Bank Aktiengesellschaft restated a "buy" rating on shares of Zscaler in a research note on Friday, September 4th. Royal Bank Of Canada raised their target price on shares of Zscaler from $210.00 to $236.00 and gave the company an "outperform" rating in a research note on Friday, September 25th. BTIG Research reiterated a "neutral" rating on shares of Zscaler in a report on Friday, September 4th. Finally, Piper Sandler boosted their target price on shares of Zscaler from $160.00 to $175.00 and gave the stock a "neutral" rating in a research report on Friday, September 4th. Thirty-four analysts have rated the stock with a Buy rating, seven have given a Hold rating and one has assigned a Sell rating to the company. Based on data from MarketBeat.com, the company presently has a consensus rating of "Moderate Buy" and a consensus target price of $224.90.

Zscaler Price Performance

Shares of NASDAQ:ZS opened at $212.25 on Wednesday. The stock has a market capitalization of $34.61 billion, a P/E ratio of -544.23, a P/E/G ratio of 21.03 and a beta of 0.94. The business has a 50-day moving average of $181.94 and a two-hundred day moving average of $155.82. Zscaler has a fifty-two week low of $114.63 and a fifty-two week high of $336.99. The company has a debt-to-equity ratio of 0.65, a current ratio of 1.70 and a quick ratio of 1.70.

Zscaler (NASDAQ:ZS - Get Free Report) last issued its quarterly earnings data on Thursday, September 3rd. The company reported $1.19 EPS for the quarter, beating analysts' consensus estimates of $1.09 by $0.10. Zscaler had a positive return on equity of 1.23% and a negative net margin of 1.88%.The business had revenue of $898.19 million for the quarter, compared to analyst estimates of $876.96 million. During the same quarter in the prior year, the firm posted $0.89 EPS. The firm's revenue for the quarter was up 24.9% on a year-over-year basis. 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 predict that Zscaler will post 0.7 EPS for the current fiscal year.

Insider Buying and Selling

In related news, Director James A. Beer sold 177 shares of the company's stock in a transaction on Thursday, September 17th. The shares were sold at an average price of $192.01, for a total transaction of $33,985.77. Following the completion of the transaction, the director directly owned 4,030 shares in the company, valued at $773,800.30. This represents a 4.21% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Jagtar Chaudhry sold 2,852 shares of the stock in a transaction on Wednesday, September 16th. The shares were sold at an average price of $192.76, for a total transaction of $549,751.52. Following the completion of the sale, the chief executive officer directly owned 340,186 shares of the company's stock, valued at approximately $65,574,253.36. This trade represents a 0.83% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders sold 29,053 shares of company stock valued at $5,610,165 in the last ninety days. Company insiders own 17.20% of the company's stock.

Institutional Inflows and Outflows

Institutional investors and hedge funds have recently made changes to their positions in the stock. Burkett Financial Services LLC acquired a new stake in Zscaler during the third quarter worth about $27,000. University of Texas Texas AM Investment Management Co. bought a new position in Zscaler during the fourth quarter valued at about $30,000. Reflection Asset Management acquired a new position in Zscaler in the 4th quarter valued at approximately $40,000. POM Investment Strategies LLC raised its holdings in Zscaler by 92.9% in the 2nd quarter. POM Investment Strategies LLC now owns 218 shares of the company's stock valued at $31,000 after acquiring an additional 105 shares in the last quarter. Finally, Versant Capital Management Inc lifted its position in shares of Zscaler by 45.6% in the 3rd quarter. Versant Capital Management Inc now owns 230 shares of the company's stock worth $46,000 after acquiring an additional 72 shares during the period. Institutional investors own 46.45% of the company's stock.

Key Headlines 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

Zscaler Company Profile

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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