Zscaler's (ZS) Buy Rating Reaffirmed at Canaccord Genuity Group

Key Points

• Canaccord Genuity reaffirmed its “buy” rating on Zscaler and set a $210 price target, implying 23.12% upside. The broader analyst consensus is “Moderate Buy,” with an average target of $216.44.
• Zscaler’s latest quarterly results exceeded expectations, with revenue of $898.2 million, up 24.9% year over year, and adjusted EPS of $1.19 versus the $1.09 consensus estimate.
• Investors face slower expected growth and profitability concerns: fiscal 2027 revenue growth is forecast at 16.6%-17.5%, the company remains GAAP-unprofitable, free-cash-flow margin declined, and Zscaler plans to cut about 3% of its workforce.

Zscaler (NASDAQ:ZS - Get Free Report)'s stock had its "buy" rating reiterated by stock analysts at Canaccord Genuity Group in a report released on Friday, Benzinga reports. They currently have a $210.00 price target on the stock. Canaccord Genuity Group's price objective would suggest a potential upside of 23.12% from the stock's current price.

A number of other analysts also recently commented on ZS. BTIG Research restated a "neutral" rating on shares of Zscaler in a research note on Friday. Needham & Company LLC lifted their price target on Zscaler from $180.00 to $215.00 and gave the company a "buy" rating in a research report on Friday. Weiss Ratings raised Zscaler from a "sell (e+)" rating to a "sell (d-)" rating in a report on Thursday, August 27th. Mizuho upped their price objective on Zscaler from $185.00 to $210.00 and gave the stock an "outperform" rating in a research report on Wednesday, August 19th. Finally, Barclays raised their price objective on shares of Zscaler from $192.00 to $200.00 and gave the stock an "overweight" rating in a research note on Friday. Thirty-four equities research analysts have rated the stock with a Buy rating, six have assigned a Hold rating and one has assigned a Sell rating to the stock. According to data from MarketBeat.com, the company has a consensus rating of "Moderate Buy" and an average price target of $216.44.

Zscaler Trading Down 4.1%

Shares of Zscaler stock opened at $170.56 on Friday. The stock has a market cap of $27.58 billion, a PE ratio of -347.82, a price-to-earnings-growth ratio of 101.67 and a beta of 0.95. The firm has a fifty day moving average price of $160.51 and a 200 day moving average price of $150.39. 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 0.72, a current ratio of 1.86 and a quick ratio of 1.86.

Zscaler (NASDAQ:ZS - Get Free Report) last posted its quarterly earnings results on Thursday, September 3rd. The company reported $1.19 EPS for the quarter, beating the consensus estimate of $1.09 by $0.10. The company had revenue of $898.18 million for the quarter, compared to analyst estimates of $876.96 million. Zscaler had a negative net margin of 2.44% and a negative return on equity of 0.37%. The firm's revenue was up 24.9% on a year-over-year basis. During the same period in the prior year, the company 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. Equities research analysts predict that Zscaler will post 0.13 earnings per share for the current year.

Insiders Place Their Bets

In related news, CFO Kevin Rubin sold 3,000 shares of the company's stock in a transaction dated Thursday, June 25th. The stock was sold at an average price of $124.22, for a total value of $372,660.00. Following the completion of the transaction, the chief financial officer owned 41,901 shares of the company's stock, valued at approximately $5,204,942.22. This represents a 6.68% decrease in their position. The transaction was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Adam Geller sold 2,817 shares of the stock in a transaction that occurred on Monday, June 22nd. The stock was sold at an average price of $122.60, for a total value of $345,364.20. Following the transaction, the insider owned 42,314 shares in the company, valued at $5,187,696.40. This represents a 6.24% 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 16,772 shares of company stock worth $2,139,799 in the last 90 days. 17.20% of the stock is currently owned by company insiders.

Institutional Investors Weigh In On Zscaler

A number of institutional investors have recently added to or reduced their stakes in ZS. California State Teachers Retirement System raised its position in Zscaler by 13,837.9% during the second 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 stake in shares of Zscaler in the second quarter valued at about $1,396,028,000. First Trust Advisors LP increased its stake in shares of Zscaler by 36.2% during the first 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 in the last quarter. Price T Rowe Associates Inc. MD increased its stake in shares of Zscaler by 43.3% during the fourth quarter. Price T Rowe Associates Inc. MD now owns 2,572,358 shares of the company's stock worth $578,576,000 after purchasing 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 3rd 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 last quarter. Institutional investors and hedge funds own 46.45% of the company's stock.

Trending Headlines about Zscaler

Here are the key news stories impacting Zscaler this week:

• Positive Sentiment: Results exceeded expectations. Zscaler reported fiscal Q4 revenue of $898.2 million, up 24.9% year over year and above the $877.0 million consensus estimate. Non-GAAP earnings of $1.19 per share also topped expectations of $1.09. Zscaler Q4 Earnings and Revenues Top Estimates
• Positive Sentiment: Profitability and enterprise demand improved. Q4 non-GAAP operating margin reached a record 24%, while annual recurring revenue rose 25% to $3.77 billion. Large-deal activity increased, Fortune 500 penetration reached 50%, and net retention was 115%, supporting continued customer expansion. Zscaler Announces Strong Fourth Quarter and Fiscal 2026 Financial Results
• Positive Sentiment: Analysts raised targets. Stephens increased its target to $225 and Needham raised its target to $215; Cantor Fitzgerald maintained an overweight rating and a $225 target, while Rosenblatt reiterated buy with a $200 target.
• Neutral Sentiment: AI remains a growth opportunity. Management highlighted momentum for Agentic SecOps and security products designed for AI workloads, but investors are awaiting evidence that these offerings can reaccelerate growth.
• Negative Sentiment: Fiscal 2027 growth is expected to slow. Zscaler forecast revenue growth of 16.6%-17.5% and ARR growth of 16.6%-17.4%, down from 25% in fiscal 2026. This deceleration overshadowed the better-than-expected quarterly results, particularly because full-year revenue guidance was broadly in line with consensus. Zscaler Forecasts Fiscal 2027 Growth
• Negative Sentiment: Restructuring and cash-flow concerns add pressure. The company plans to eliminate about 3% of its workforce as it reallocates resources toward AI and growth initiatives. Q4 free-cash-flow margin fell to 7% from 24% a year earlier because of significantly higher capital spending, while Zscaler remains GAAP unprofitable.
• Negative Sentiment: Some investors question the valuation case. Although ZS trades at a historically lower forward multiple, analysts note that its projected growth lacks the acceleration seen at some AI-focused cybersecurity peers.

About Zscaler

Zscaler is a cloud security company that delivers a cloud-native platform to protect users, applications and data as organizations move away from traditional, network-centric security architectures. The company focuses on a zero trust approach that assumes no implicit trust for users or devices, providing secure access to the internet, SaaS applications and private applications regardless of where users are located. Zscaler positions its services as an alternative to legacy appliances and site-centric VPNs, aiming to simplify security while enabling modern, distributed workforces.

Key offerings are built around the Zscaler Zero Trust Exchange, a multi-tenant cloud platform that enforces security and access policies in-line.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.

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