B. Riley Financial Has Lowered Expectations for Zscaler (NASDAQ:ZS) Stock Price

Key Points

• B. Riley Financial lowered its price target on Zscaler from $225 to $215 while keeping a Buy rating, implying about 59.6% upside from the stock’s current price.
• Several other analysts also trimmed their targets on Zscaler, but the broader Street view remains constructive with a Moderate Buy consensus and an average price target of $229.36.
• Zscaler reported better-than-expected fiscal Q3 results, with EPS of $1.08 and revenue of $850.5 million, and raised its fiscal 2026 guidance despite the stock trading sharply lower on the day.

Zscaler (NASDAQ:ZS - Get Free Report) had its price target dropped by analysts at B. Riley Financial from $225.00 to $215.00 in a report released on Wednesday,MarketScreener reports. The firm currently has a "buy" rating on the stock. B. Riley Financial's price target suggests a potential upside of 59.57% from the company's current price.

Other research analysts also recently issued reports about the company. Citigroup restated a "market outperform" rating on shares of Zscaler in a research note on Wednesday. Robert W. Baird cut their price objective on shares of Zscaler from $265.00 to $230.00 and set an "outperform" rating on the stock in a report on Wednesday. Stephens set a $205.00 price objective on shares of Zscaler in a research report on Wednesday. Sanford C. Bernstein dropped their target price on shares of Zscaler from $228.00 to $224.00 and set an "outperform" rating on the stock in a research report on Wednesday. Finally, Canaccord Genuity Group decreased their price target on shares of Zscaler from $275.00 to $210.00 and set a "buy" rating for the company in a report on Wednesday. Two equities research analysts have rated the stock with a Strong Buy rating, thirty have given a Buy rating, seven have issued a Hold rating and three have issued a Sell rating to the company. According to MarketBeat.com, the stock currently has a consensus rating of "Moderate Buy" and an average target price of $229.36.

Zscaler Trading Down 27.0%

NASDAQ ZS opened at $134.74 on Wednesday. The company has a quick ratio of 1.90, a current ratio of 1.90 and a debt-to-equity ratio of 0.78. The firm has a market cap of $21.66 billion, a PE ratio of -318.90 and a beta of 0.96. The company has a 50 day moving average price of $145.75 and a 200 day moving average price of $192.65. Zscaler has a 52 week low of $114.63 and a 52 week high of $336.99.

Zscaler (NASDAQ:ZS - Get Free Report) last announced its earnings results on Tuesday, May 26th. The company reported $1.08 earnings per share for the quarter, beating the consensus estimate of $1.01 by $0.07. Zscaler had a negative net margin of 2.25% and a positive return on equity of 0.06%. The company had revenue of $850.48 million during the quarter, compared to the consensus estimate of $835.60 million. During the same period last year, the firm earned $0.84 earnings per share. Zscaler's revenue was up 25.4% compared to the same quarter last year. Zscaler has set its Q4 2026 guidance at 1.080-1.090 EPS and its FY 2026 guidance at 4.100-4.110 EPS. As a group, sell-side analysts forecast that Zscaler will post -0.03 EPS for the current fiscal year.

Insider Buying and Selling at Zscaler

In related news, CFO Kevin Rubin sold 1,682 shares of the company's stock in a transaction dated Tuesday, March 17th. The stock was sold at an average price of $156.59, for a total value of $263,384.38. Following the completion of the transaction, the chief financial officer owned 46,479 shares of the company's stock, valued at approximately $7,278,146.61. This represents a 3.49% decrease in their position. The transaction was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. Also, EVP Raj Judge sold 2,488 shares of Zscaler stock in a transaction dated Tuesday, March 17th. The shares were sold at an average price of $156.59, for a total transaction of $389,595.92. Following the completion of the sale, the executive vice president owned 67,906 shares in the company, valued at approximately $10,633,400.54. This trade represents a 3.53% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Over the last 90 days, insiders sold 12,130 shares of company stock worth $1,892,487. 17.20% of the stock is currently owned by company insiders.

Institutional Trading of Zscaler

Several large investors have recently bought and sold shares of ZS. Groupama Asset Managment lifted its stake in Zscaler by 76,352.6% in the 3rd quarter. Groupama Asset Managment now owns 4,750,000 shares of the company's stock worth $1,423,385,000 after purchasing an additional 4,743,787 shares in the last quarter. First Trust Advisors LP grew its position 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 purchasing an additional 935,781 shares in the last quarter. Price T Rowe Associates Inc. MD grew its position in shares of 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 purchasing an additional 777,414 shares in the last quarter. AQR Capital Management LLC increased its holdings in shares of 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 purchasing an additional 741,756 shares during the last quarter. Finally, Pictet Asset Management Holding SA increased its holdings in shares of Zscaler by 52.5% in 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 purchasing an additional 661,413 shares during the last quarter. Hedge funds and other institutional investors own 46.45% of the company's stock.

More Zscaler News

Here are the key news stories impacting Zscaler this week:

• Positive Sentiment: Zscaler reported fiscal Q3 revenue of $850.5 million and EPS of $1.08, both above estimates, while revenue rose 25% year over year and ARR also grew 25%, reinforcing the company’s strong core demand. Article: Zscaler Announces Strong Third-Quarter Fiscal 2026 Results
• Positive Sentiment: Management raised FY26 guidance and pointed to strength in AI security and record margins, which supports the long-term growth narrative for the cybersecurity platform. Article: ZS Q3 Earnings Call Flags Prudent Growth Outlook
• Positive Sentiment: Several analysts still view the stock favorably despite trimming targets, with Rosenblatt, Bernstein, Baird, and Needham maintaining bullish or buy-equivalent ratings, suggesting Wall Street still sees upside from current levels. Article: Analyst target updates
• Neutral Sentiment: New commentary on Zscaler’s AI security strategy and product expansion adds to the growth story, but also notes the stock may still need stronger execution to justify its valuation. Article: As Zscaler Doubles Down on AI Security, ZS Stock Still Needs More to Justify Its Steep Valuation
• Negative Sentiment: Despite the beat, Zscaler’s guidance disappointed traders: the company forecast fourth-quarter revenue slightly below estimates, and Reuters said the outlook reflected intensifying competition in cybersecurity and more cautious enterprise spending. Article: Zscaler sees downbeat quarterly revenue as competition heats up in cybersecurity market
• Negative Sentiment: Some recent analyst notes turned more cautious, including a Seeking Alpha downgrade citing slowing organic growth, weaker net-new ARR momentum, and competitive pressure from integrated security platforms. Article: Zscaler Q1: I Was Right (Rating Downgrade)

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.

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