Zscaler's (ZS) Buy Rating Reaffirmed at Rosenblatt Securities

Key Points

• Rosenblatt Securities reaffirmed its “Buy” rating on Zscaler and maintained a $200 price target, implying 12.49% upside from the prior close. Analysts overall assign the stock a “Moderate Buy” consensus rating with a $214.90 average target.
• Zscaler reported quarterly revenue of $898.2 million, up 24.9% year over year and above estimates, while adjusted EPS of $1.19 exceeded the $1.09 consensus. Its fiscal Q1 and full-year 2027 earnings guidance also came in ahead of analyst expectations.
• Despite strong adjusted results, investors face risks including expected growth deceleration to roughly 17% in fiscal 2027, continued GAAP losses, lower free-cash-flow margins, and a restructuring that will eliminate about 3% of the workforce.

Zscaler (NASDAQ:ZS - Get Free Report)'s stock had its "buy" rating reiterated by Rosenblatt Securities in a research report issued to clients and investors on Friday, Benzinga reports. They currently have a $200.00 price target on the stock. Rosenblatt Securities' target price suggests a potential upside of 12.49% from the stock's previous close.

ZS has been the subject of a number of other research reports. TD Cowen lifted their target price on Zscaler from $180.00 to $200.00 and gave the stock a "buy" rating in a report on Monday, August 17th. Mizuho increased their price target on Zscaler from $185.00 to $210.00 and gave the company an "outperform" rating in a report on Wednesday, August 19th. Royal Bank Of Canada restated an "outperform" rating and issued a $200.00 price target on shares of Zscaler in a research report on Wednesday, June 10th. BMO Capital Markets reaffirmed an "outperform" rating and set a $200.00 price objective (up from $178.00) on shares of Zscaler in a research note on Friday. Finally, UBS Group dropped their price objective on shares of Zscaler from $260.00 to $225.00 and set a "buy" rating for the company in a research note on Wednesday, May 27th. Thirty-four 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 company. According to MarketBeat, Zscaler currently has a consensus rating of "Moderate Buy" and a consensus price target of $214.90.

Zscaler Stock Up 2.9%

Shares of NASDAQ:ZS opened at $177.80 on Friday. The company has a current ratio of 1.86, a quick ratio of 1.86 and a debt-to-equity ratio of 0.72. Zscaler has a 12 month low of $114.63 and a 12 month high of $336.99. The company has a 50-day moving average price of $160.51 and a 200 day moving average price of $150.39. The company has a market cap of $28.75 billion, a price-to-earnings ratio of -370.41, a PEG ratio of 101.67 and a beta of 0.95.

Zscaler (NASDAQ:ZS - Get Free Report) last released its quarterly earnings results on Thursday, September 3rd. The company reported $1.19 EPS for the quarter, topping the consensus estimate of $1.09 by $0.10. Zscaler had a negative return on equity of 0.37% and a negative net margin of 2.44%.The company had revenue of $898.18 million during the quarter, compared to analyst estimates of $876.96 million. During the same quarter last year, the business posted $0.89 earnings per share. The firm's revenue was up 24.9% on a year-over-year basis. 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 predict that Zscaler will post 0.13 earnings per share for the current year.

Insiders Place Their Bets

In related news, CEO Jagtar Chaudhry sold 2,878 shares of the business's stock in a transaction on Tuesday, June 16th. The stock was sold at an average price of $126.43, for a total transaction of $363,865.54. Following the completion of the transaction, the chief executive officer owned 343,038 shares in the company, valued at $43,370,294.34. The trade was a 0.83% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this hyperlink. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, insider Adam Geller sold 2,817 shares of the company's stock in a transaction on Monday, June 22nd. The shares were sold at an average price of $122.60, for a total value of $345,364.20. Following the completion of the transaction, the insider directly owned 42,314 shares in the company, valued at $5,187,696.40. This trade 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. In the last ninety days, insiders sold 16,772 shares of company stock worth $2,139,799. Corporate insiders own 17.20% of the company's stock.

Institutional Trading of Zscaler

Several institutional investors and hedge funds have recently made changes to their positions in the business. Binnacle Investments Inc purchased a new stake in shares of Zscaler during the third quarter valued at $25,000. AlphaCentric Advisors LLC purchased a new position in Zscaler in the 4th quarter worth about $29,000. University of Texas Texas AM Investment Management Co. purchased a new position in Zscaler in the 4th quarter worth about $30,000. POM Investment Strategies LLC increased its stake in Zscaler by 92.9% in the 2nd quarter. POM Investment Strategies LLC now owns 218 shares of the company's stock worth $31,000 after buying an additional 105 shares during the period. Finally, Mcguire Capital Advisors Inc. bought a new stake in Zscaler during the 4th quarter valued at about $32,000. 46.45% of the stock is currently owned by institutional investors.

Key Headlines Impacting Zscaler

Here are the key news stories impacting Zscaler this week:

• Positive Sentiment: Zscaler reported fiscal Q4 revenue of $898.2 million, up 24.9% year over year and above the $877.0 million consensus estimate. Adjusted EPS of $1.19 also exceeded expectations of $1.09. Zscaler Q4 Earnings and Revenues Top Estimates
• Positive Sentiment: Annual recurring revenue increased 25% to $3.77 billion, while non-GAAP operating margin reached a record 24%. Management cited demand for AI-powered security, large deals, non-seat-based products and its Agentic SecOps offering as growth drivers. Zscaler stock soars on earnings beat, upbeat guidance
• Positive Sentiment: Fiscal Q1 2027 guidance was ahead of analyst expectations, with revenue of $935 million to $939 million and adjusted EPS of $1.15 to $1.16 versus consensus estimates of $925.5 million and $0.86, respectively. Full-year adjusted EPS guidance of $4.86 to $4.90 also exceeded the $3.70 consensus. Zscaler Announces Strong Fourth Quarter and Fiscal 2026 Financial Results
• Neutral Sentiment: Zscaler is restructuring and eliminating approximately 3% of its workforce to redirect resources toward AI and other strategic initiatives. The move could improve efficiency but introduces execution and morale risks. Zscaler forecasts FY2027 growth as it restructures
• Negative Sentiment: Fiscal 2027 revenue and ARR growth are expected to slow to roughly 17%, compared with 25% in fiscal 2026. Excluding the Red Canary acquisition, fiscal 2026 revenue growth was already 20%, intensifying concerns about deceleration. Zscaler Issued New Guidance
• Negative Sentiment: Despite strong adjusted profitability, Zscaler still posted a $3.4 million GAAP quarterly loss and a $63.2 million full-year loss. Fourth-quarter free-cash-flow margin fell to 7% from 24% because of substantially higher capital expenditures. Zscaler Loss Narrows As Revenue Soars

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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