Zscaler (NASDAQ:ZS) Stock Gets Price Target Boost from Needham & Company LLC

Key Points

• Needham raised Zscaler’s price target to $255 from $215 and maintained a “Buy” rating, implying approximately 20% upside. The broader analyst consensus is “Moderate Buy,” with an average target of $224.90.
• Zscaler’s latest quarterly results exceeded expectations, with adjusted EPS of $1.19 versus $1.09 expected and revenue of $898.19 million versus $876.96 million estimated. Revenue increased 24.9% year over year, while management reaffirmed its fiscal 2027 guidance.
• Investor sentiment is supported by rising demand for zero-trust security linked to AI-related cyber risks and recent institutional buying, though insider stock sales and a newly announced investor investigation create potential overhangs.

Zscaler (NASDAQ:ZS - Get Free Report) had its price objective hoisted by research analysts at Needham & Company LLC from $215.00 to $255.00 in a report released on Wednesday, Benzinga reports. The firm currently has a "buy" rating on the stock. Needham & Company LLC's price target would suggest a potential upside of 20.14% from the company's current price.

Other equities research analysts have also issued reports about the company. Zacks Research upgraded Zscaler from a "strong sell" rating to a "hold" rating in a research note on Friday, October 2nd. KeyCorp upped their price objective on shares of Zscaler from $185.00 to $210.00 and gave the stock an "overweight" rating in a report on Friday, August 21st. Roth Capital reissued a "neutral" rating and set a $170.00 target price on shares of Zscaler in a research note on Saturday, September 5th. Barclays boosted their price target on shares of Zscaler from $200.00 to $220.00 and gave the stock an "overweight" rating in a research note on Tuesday, September 29th. Finally, BTIG Research reissued a "neutral" rating on shares of Zscaler 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 stock. According to data from MarketBeat.com, the company currently has a consensus rating of "Moderate Buy" and an average price target of $224.90.

Zscaler Stock Performance

Shares of Zscaler 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 company has a quick ratio of 1.70, a current ratio of 1.70 and a debt-to-equity ratio of 0.65. The stock's fifty day moving average is $181.94 and its two-hundred day moving average is $155.82.

Zscaler (NASDAQ:ZS - Get Free Report) last posted 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 company had revenue of $898.19 million during 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%.Zscaler's revenue was up 24.9% on a year-over-year basis. During the same quarter in the prior year, the business earned $0.89 earnings per share. Zscaler has set its FY 2027 guidance at 4.860-4.900 EPS and its Q1 2027 guidance at 1.150-1.160 EPS. As a group, analysts expect that Zscaler will post 0.7 earnings per share for the current year.

Insider Activity

In other news, CEO Jagtar Chaudhry sold 2,852 shares of the stock in a transaction dated Wednesday, September 16th. The shares were sold at an average price of $192.76, for a total transaction of $549,751.52. Following the transaction, the chief executive officer directly owned 340,186 shares in the company, valued at $65,574,253.36. This represents a 0.83% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is available at this link. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CFO Kevin Rubin sold 519 shares of the stock in a transaction on Friday, September 25th. The stock was sold at an average price of $197.28, for a total value of $102,388.32. Following the completion of the transaction, the chief financial officer directly owned 42,768 shares in the company, valued at $8,437,271.04. This trade represents a 1.20% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold 29,053 shares of company stock valued at $5,610,165 in the last 90 days. Insiders own 17.20% of the company's stock.

Institutional Trading of Zscaler

A number of institutional investors have recently added to or reduced their stakes in ZS. Handelsbanken Fonder AB grew its holdings in Zscaler by 89.6% during the 2nd quarter. Handelsbanken Fonder AB now owns 60,933 shares of the company's stock worth $8,601,000 after acquiring an additional 28,792 shares in the last quarter. Assenagon Asset Management S.A. raised its stake in shares of Zscaler by 6.6% in the 2nd quarter. Assenagon Asset Management S.A. now owns 193,297 shares of the company's stock valued at $27,284,000 after purchasing an additional 11,941 shares in the last quarter. Bank of America Corp DE lifted its position in shares of Zscaler by 44.3% during the first quarter. Bank of America Corp DE now owns 779,245 shares of the company's stock worth $109,320,000 after purchasing an additional 239,326 shares during the last quarter. Danica Pension Livsforsikringsaktieselskab bought a new position in shares of Zscaler during the second quarter worth about $11,232,000. Finally, Amundi grew its stake in 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 in the last quarter. 46.45% of the stock is owned by hedge funds and other institutional investors.

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

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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