Zscaler (NASDAQ:ZS) Receives Outperform Rating from Wedbush

Key Points

• Wedbush reiterated its “outperform” rating on Zscaler and maintained a $215 price target, implying approximately 31.5% upside from the reported $163.48 share price.
• Zscaler reported quarterly results above expectations, with EPS of $1.19 versus a $1.09 consensus estimate and revenue of $898.19 million versus $876.96 million; revenue increased 24.9% year over year.
• Analyst sentiment remains favorable, with 34 Buy, six Hold, and two Sell ratings, producing a “Moderate Buy” consensus and average price target of $216.53.

Zscaler (NASDAQ:ZS - Get Free Report)'s stock had its "outperform" rating reiterated by Wedbush in a report released on Friday, Benzinga reports. They presently have a $215.00 price objective on the stock. Wedbush's target price indicates a potential upside of 31.51% from the stock's current price.

A number of other brokerages have also recently weighed in on ZS. Berenberg Bank set a $200.00 price target on shares of Zscaler in a research note on Thursday, May 28th. Scotiabank reiterated an "outperform" rating on shares of Zscaler in a research note on Friday, September 4th. Royal Bank Of Canada boosted their price target on Zscaler from $200.00 to $210.00 and gave the company an "outperform" rating in a research report on Friday, September 4th. Barclays increased their price target on Zscaler from $192.00 to $200.00 and gave the stock an "overweight" rating in a report on Friday, September 4th. Finally, B. Riley Financial dropped their target price on Zscaler from $225.00 to $215.00 and set a "buy" rating on the stock in a research report on Wednesday, May 27th. Thirty-four equities research analysts have rated the stock with a Buy rating, six have given a Hold rating and two have given a Sell rating to the stock. Based on data from MarketBeat.com, the stock currently has a consensus rating of "Moderate Buy" and an average target price of $216.53.

Zscaler Price Performance

Shares of NASDAQ ZS opened at $163.48 on Friday. The stock's 50-day moving average is $163.04 and its two-hundred day moving average is $150.25. The company has a market cap of $26.66 billion, a price-to-earnings ratio of -419.18, a price-to-earnings-growth ratio of 21.48 and a beta of 0.95. Zscaler has a 1-year low of $114.63 and a 1-year 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 announced its quarterly earnings results on Thursday, September 3rd. The company reported $1.19 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $1.09 by $0.10. The company had revenue of $898.19 million during the quarter, compared to the consensus estimate of $876.96 million. Zscaler had a positive return on equity of 1.23% and a negative net margin of 1.88%.Zscaler's revenue for the quarter was up 24.9% on a year-over-year basis. During the same period in the previous year, the business 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. Analysts forecast that Zscaler will post 0.56 EPS for the current fiscal year.

Insider Activity

In other news, insider Adam Geller sold 2,817 shares of the business's stock in a transaction dated Monday, June 22nd. The stock was sold at an average price of $122.60, for a total transaction of $345,364.20. Following the completion of the sale, the insider owned 42,314 shares in the company, valued at approximately $5,187,696.40. The trade was a 6.24% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Jagtar Chaudhry sold 2,878 shares of the stock in a transaction on Tuesday, June 16th. The shares were sold at an average price of $126.43, for a total value of $363,865.54. Following the completion of the sale, the chief executive officer owned 343,038 shares of the company's stock, valued at approximately $43,370,294.34. This represents a 0.83% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders sold a total of 16,772 shares of company stock valued at $2,139,799 over the last quarter. Insiders own 17.20% of the company's stock.

Hedge Funds Weigh In On Zscaler

Institutional investors have recently added to or reduced their stakes in the company. California State Teachers Retirement System boosted its position in Zscaler by 13,837.9% during the 2nd quarter. California State Teachers Retirement System now owns 19,388,787 shares of the company's stock worth $2,736,727,000 after acquiring an additional 19,249,679 shares during the period. BlackRock Inc. acquired a new position in Zscaler during the second quarter worth about $1,396,028,000. First Trust Advisors LP grew its stake in shares of Zscaler by 36.2% in the 1st quarter. First Trust Advisors LP now owns 3,518,678 shares of the company's stock worth $493,635,000 after purchasing an additional 935,781 shares during the last quarter. Price T Rowe Associates Inc. MD increased its holdings in shares of Zscaler by 43.3% in the fourth quarter. Price T Rowe Associates Inc. MD now owns 2,572,358 shares of the company's stock valued at $578,576,000 after buying an additional 777,414 shares in the last quarter. Finally, AQR Capital Management LLC raised its position in shares of Zscaler by 61.8% during the third quarter. AQR Capital Management LLC now owns 1,941,571 shares of the company's stock worth $576,083,000 after purchasing an additional 741,756 shares during the period. Institutional investors and hedge funds own 46.45% of the company's stock.

About Zscaler

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

The company's offerings include Zscaler Internet Access, which secures access to internet and software-as-a-service applications, and Zscaler Private Access, which provides secure, policy-based access to private applications without requiring conventional virtual private networks.

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