Zscaler's (ZS) "Overweight" Rating Reiterated at Cantor Fitzgerald

Key Points

• Cantor Fitzgerald reiterated its “Overweight” rating on Zscaler and maintained a $225 price target, implying roughly 26.6% upside from the stock’s $177.80 opening price. Analysts remain broadly positive, with a “Moderate Buy” consensus rating and a $214.90 average target.
• Zscaler reported a quarterly earnings and revenue beat, with $1.19 in adjusted EPS and $898.2 million in revenue, up 24.9% year over year. Fiscal 2027 first-quarter and full-year adjusted EPS guidance also exceeded consensus expectations.
• Investors should weigh the strong results against slowing expected growth and ongoing losses: fiscal 2027 revenue and ARR growth are projected at about 17%, while the company posted a GAAP loss and lower fourth-quarter free-cash-flow margin.

Zscaler (NASDAQ:ZS - Get Free Report)'s stock had its "overweight" rating restated by research analysts at Cantor Fitzgerald in a research report issued on Friday, Benzinga reports. They currently have a $225.00 price target on the stock. Cantor Fitzgerald's target price points to a potential upside of 26.55% from the stock's current price.

A number of other brokerages also recently weighed in on ZS. Piper Sandler cut their price target on shares of Zscaler from $185.00 to $160.00 and set a "neutral" rating for the company in a report on Wednesday, May 27th. BMO Capital Markets reissued an "outperform" rating and issued a $200.00 price objective (up from $178.00) on shares of Zscaler in a research note on Friday. Guggenheim restated a "buy" rating on shares of Zscaler in a research report on Friday. BTIG Research restated a "neutral" rating on shares of Zscaler in a research note on Friday. Finally, Scotiabank cut their target price on Zscaler from $190.00 to $175.00 and set a "sector outperform" rating for the company in a research note on Wednesday, May 27th. Thirty-four investment analysts have rated the stock with a Buy rating, six have assigned a Hold rating and one has issued a Sell rating to the stock. According to MarketBeat, the company has an average rating of "Moderate Buy" and a consensus target price of $214.90.

Zscaler Stock Up 2.9%

Shares of 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 firm's 50 day moving average is $160.51 and its 200-day moving average is $150.39. The stock has a market capitalization of $28.75 billion, a PE ratio of -370.41, a P/E/G ratio of 101.67 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 the consensus estimate of $1.09 by $0.10. The firm had revenue of $898.18 million during the quarter, compared to analysts' expectations of $876.96 million. Zscaler had a negative return on equity of 0.37% and a negative net margin of 2.44%.The company's quarterly revenue was up 24.9% compared to the same quarter last year. During the same period in the previous year, the firm earned $0.89 EPS. 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 forecast that Zscaler will post 0.13 EPS for the current year.

Insider Transactions at Zscaler

In other news, CFO Kevin Rubin sold 3,000 shares of Zscaler stock in a transaction dated Thursday, June 25th. The stock was sold at an average price of $124.22, for a total transaction of $372,660.00. Following the sale, the chief financial officer directly owned 41,901 shares of the company's stock, valued at approximately $5,204,942.22. This trade represents a 6.68% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Robert Schlossman sold 3,146 shares of the firm's stock in a transaction that occurred on Tuesday, June 16th. The shares were sold at an average price of $126.43, for a total transaction of $397,748.78. Following the completion of the transaction, the insider owned 69,366 shares of the company's stock, valued at approximately $8,769,943.38. This trade represents a 4.34% decrease in their position. The SEC filing for this sale provides additional information. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders have sold a total of 16,772 shares of company stock valued at $2,139,799 over the last quarter. 17.20% of the stock is currently owned by insiders.

Hedge Funds Weigh In On Zscaler

Hedge funds have recently modified their holdings of the business. California State Teachers Retirement System raised its position in shares of 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 last quarter. BlackRock Inc. bought a new stake in Zscaler in the second quarter worth about $1,396,028,000. First Trust Advisors LP raised its position in Zscaler by 36.2% in the first quarter. First Trust Advisors LP now owns 3,518,678 shares of the company's stock worth $493,635,000 after acquiring an additional 935,781 shares during the period. Price T Rowe Associates Inc. MD boosted its stake in Zscaler by 43.3% in the fourth quarter. Price T Rowe Associates Inc. MD now owns 2,572,358 shares of the company's stock valued at $578,576,000 after acquiring an additional 777,414 shares during the last quarter. Finally, AQR Capital Management LLC boosted its stake in Zscaler by 61.8% in the third quarter. AQR Capital Management LLC now owns 1,941,571 shares of the company's stock valued at $576,083,000 after acquiring an additional 741,756 shares during the last quarter. Institutional investors and hedge funds own 46.45% of the company's stock.

Key Zscaler News

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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