DA Davidson Initiates Coverage on Zscaler (NASDAQ:ZS)

Key Points

• DA Davidson initiated coverage of Zscaler with a “neutral” rating and a $215 price target, implying approximately 7.1% downside from the reported share price.
• Analyst sentiment remains broadly positive, with 36 Buy ratings, eight Holds and one Sell; the consensus rating is “Moderate Buy” with an average price target of $239.44.
• Zscaler recently exceeded quarterly expectations, reporting $1.19 in earnings per share versus $1.09 expected and $898.19 million in revenue, up 24.9% year over year. Insiders have sold roughly $11.3 million of shares over the past 90 days.

Research analysts at DA Davidson assumed coverage on shares of Zscaler (NASDAQ:ZS - Get Free Report) in a report issued on Wednesday, MarketBeat reports. The firm set a "neutral" rating and a $215.00 price target on the stock. DA Davidson's price target would suggest a potential downside of 7.06% from the company's current price.

A number of other equities analysts also recently commented on the company. Stephens lifted their price objective on Zscaler from $225.00 to $265.00 and gave the stock an "overweight" rating in a research report on Wednesday, October 7th. JPMorgan Chase & Co. lifted their price objective on Zscaler from $215.00 to $245.00 and gave the stock an "overweight" rating in a research report on Wednesday, October 7th. Citigroup lifted their price objective on Zscaler from $245.00 to $260.00 and gave the stock a "buy" rating in a research report on Thursday, October 15th. Needham & Company LLC lifted their price objective on Zscaler from $215.00 to $255.00 and gave the stock a "buy" rating in a research report on Wednesday, October 7th. Finally, Piper Sandler lifted their price objective on Zscaler from $160.00 to $175.00 and gave the stock a "neutral" rating in a research report on Friday, September 4th. Thirty-six investment analysts have rated the stock with a Buy rating, eight have issued a Hold rating and one has given a Sell rating to the stock. Based on data from MarketBeat.com, the stock presently has an average rating of "Moderate Buy" and a consensus target price of $239.44.

Zscaler Stock Performance

NASDAQ ZS opened at $231.33 on Wednesday. The company has a market cap of $37.72 billion, a PE ratio of -593.15, a price-to-earnings-growth ratio of 20.61 and a beta of 0.94. The stock's 50 day simple moving average is $194.52 and its 200-day simple moving average is $161.88. 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 released its earnings results on Thursday, September 3rd. The company reported $1.19 earnings per share for the quarter, beating the consensus estimate of $1.09 by $0.10. The business had revenue of $898.19 million for 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%. The business's quarterly revenue was up 24.9% compared to the same quarter last year. During the same quarter last year, the business posted $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, equities research analysts anticipate that Zscaler will post 0.69 EPS for the current fiscal year.

Insiders Place Their Bets

In other Zscaler news, insider Adam Geller sold 1,042 shares of Zscaler stock in a transaction on Monday, October 12th. The stock was sold at an average price of $235.95, for a total value of $245,859.90. Following the sale, the insider owned 38,308 shares in the company, valued at $9,038,772.60. The trade was a 2.65% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Kevin Rubin sold 519 shares of Zscaler stock in a transaction on Friday, September 25th. The shares were sold at an average price of $197.28, for a total value of $102,388.32. Following the completion of the sale, the chief financial officer owned 42,768 shares in the company, valued at $8,437,271.04. This represents a 1.20% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold 54,053 shares of company stock worth $11,256,876 over the last ninety days. Company insiders own 17.20% of the company's stock.

Institutional Investors Weigh In On Zscaler

A number of institutional investors and hedge funds have recently added to or reduced their stakes in ZS. Handelsbanken Fonder AB grew its stake 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 purchasing an additional 28,792 shares in the last quarter. Assenagon Asset Management S.A. grew its stake in Zscaler by 6.6% during the 2nd quarter. Assenagon Asset Management S.A. now owns 193,297 shares of the company's stock worth $27,284,000 after purchasing an additional 11,941 shares in the last quarter. Bank of America Corp DE grew its stake in Zscaler by 44.3% during the 1st 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 in the last quarter. Danica Pension Livsforsikringsaktieselskab acquired a new position in Zscaler during the 2nd quarter worth $11,232,000. Finally, Amundi grew its stake in Zscaler by 12.8% during the 2nd 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. Hedge funds and other institutional investors own 46.45% of the company's stock.

About Zscaler

Zscaler, Inc is a cloud-based cybersecurity company that helps organizations secure access to applications, websites, data and other digital resources. Its platform is designed around a zero-trust security model, which verifies users and devices and enforces security policies before granting access, rather than relying primarily on a traditional corporate network perimeter.

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