Wedbush Reaffirms "Outperform" Rating for Zscaler (NASDAQ:ZS)

Key Points

• Wedbush reaffirmed an “Outperform” rating on Zscaler with a $215 price target, implying 11.37% upside. Analysts overall maintain a “Moderate Buy” consensus with an average target of $219.28.
• 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.
• Insiders sold 28,656 shares worth approximately $5.53 million over the past three months, while institutional ownership stands at 46.45%; several large investment firms recently added or initiated positions.

Zscaler (NASDAQ:ZS - Get Free Report)'s stock had its "outperform" rating restated by stock analysts at Wedbush in a research report issued to clients and investors on Monday, Benzinga reports. They presently have a $215.00 target price on the stock. Wedbush's price objective indicates a potential upside of 11.37% from the stock's previous close.

Other analysts have also recently issued reports about the company. KeyCorp increased their price target on Zscaler from $185.00 to $210.00 and gave the stock an "overweight" rating in a research report on Friday, August 21st. Barclays upped their price objective on Zscaler from $192.00 to $200.00 and gave the stock an "overweight" rating in a research note on Friday, September 4th. Deutsche Bank Aktiengesellschaft reaffirmed a "buy" rating on shares of Zscaler in a research report on Friday, September 4th. JPMorgan Chase & Co. raised their target price on Zscaler from $205.00 to $215.00 and gave the company an "overweight" rating in a research note on Wednesday, August 26th. Finally, Morgan Stanley upped their price target on shares of Zscaler from $145.00 to $165.00 and gave the stock an "equal weight" rating in a research report on Friday, September 4th. Thirty-four research analysts have rated the stock with a Buy rating, six have assigned a Hold rating and two have issued a Sell rating to the stock. Based on data from MarketBeat.com, the company presently has a consensus rating of "Moderate Buy" and an average price target of $219.28.

Zscaler Stock Performance

Zscaler stock opened at $193.05 on Monday. Zscaler has a 1 year low of $114.63 and a 1 year high of $336.99. The firm's 50-day moving average is $174.24 and its 200-day moving average is $153.53. The company has a debt-to-equity ratio of 0.65, a quick ratio of 1.70 and a current ratio of 1.70. The company has a market cap of $31.48 billion, a P/E ratio of -495.00, a PEG ratio of 20.12 and a beta of 0.95.

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

Insider Activity at Zscaler

In related news, insider Adam Geller sold 5,578 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 value of $1,075,215.28. Following the completion of the transaction, the insider owned 43,553 shares in the company, valued at $8,395,276.28. This represents a 11.35% decrease in their position. The sale was disclosed in a filing with the SEC, which is available at this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, Director James A. Beer sold 177 shares of the firm's stock in a transaction dated Thursday, September 17th. The shares were sold at an average price of $192.01, for a total transaction of $33,985.77. Following the transaction, the director directly owned 4,030 shares in the company, valued at approximately $773,800.30. The trade was a 4.21% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last three months, insiders sold 28,656 shares of company stock valued at $5,526,076. 17.20% of the stock is owned by corporate insiders.

Institutional Trading of Zscaler

A number of institutional investors have recently made changes to their positions in the stock. BlackRock Inc. acquired a new position in shares of Zscaler during the 2nd quarter valued at $1,396,028,000. First Trust Advisors LP lifted its holdings in shares of Zscaler by 36.2% in the first quarter. First Trust Advisors LP now owns 3,518,678 shares of the company's stock valued at $493,635,000 after buying an additional 935,781 shares during the period. Connor Clark & Lunn Investment Management Ltd. bought a new position in Zscaler during the second quarter valued at about $102,271,000. Pictet Asset Management Holding SA boosted its stake in Zscaler by 52.5% during the first quarter. Pictet Asset Management Holding SA now owns 1,920,540 shares of the company's stock valued at $269,285,000 after buying an additional 661,413 shares in the last quarter. Finally, Legal & General Group Plc acquired a new position in Zscaler during the second quarter worth about $89,740,000. 46.45% of the stock is owned by institutional investors and hedge funds.

Zscaler Company Profile

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.