Zscaler (NASDAQ:ZS) Issues Quarterly Earnings Results, Misses Estimates By $0.95 EPS

Key Points

• Zscaler reported quarterly EPS of $0.14, falling $0.95 short of the $1.09 consensus estimate. The company also posted a negative net margin of 2.44% and negative return on equity of 0.37%.
• Zscaler shares rose $5.07 to $177.80 during Thursday trading, with volume exceeding its average. The stock remains well below its 52-week high of $336.99 and has a market capitalization of approximately $28.75 billion.
• Analysts remain broadly positive, with 34 Buy ratings, six Holds and one Sell, producing a consensus rating of “Moderate Buy” and an average price target of $213.10.

Zscaler (NASDAQ:ZS - Get Free Report) issued its quarterly earnings data on Thursday. The company reported $0.14 earnings per share for the quarter, missing the consensus estimate of $1.09 by ($0.95), Zacks reports. Zscaler had a negative net margin of 2.44% and a negative return on equity of 0.37%.

Zscaler Stock Performance

Zscaler stock traded up $5.07 during trading hours on Thursday, hitting $177.80. The stock had a trading volume of 6,878,209 shares, compared to its average volume of 3,332,915. The company has a 50-day moving average of $159.43 and a two-hundred day moving average of $150.39. The company has a quick ratio of 1.86, a current ratio of 1.86 and a debt-to-equity ratio of 0.72. Zscaler has a fifty-two week low of $114.63 and a fifty-two week high of $336.99. The company has a market cap of $28.75 billion, a PE ratio of -370.41, a price-to-earnings-growth ratio of 104.98 and a beta of 0.95.

More Zscaler News

Here are the key news stories impacting Zscaler this week:

• Positive Sentiment: Quarterly earnings beat expectations. Zscaler exceeded Wall Street’s fiscal fourth-quarter estimates, providing the primary catalyst for the stock’s move higher. Zscaler stock soars on earnings beat, upbeat guidance
• Positive Sentiment: Growth remained strong. Zscaler reported 25% year-over-year growth in both fourth-quarter and fiscal-year revenue, while annual recurring revenue also increased 25% year over year. Sustained ARR growth supports the company’s recurring-revenue model and long-term expansion story. Zscaler Announces Strong Fourth Quarter and Fiscal 2026 Financial Results
• Positive Sentiment: Outlook and product momentum improved investor confidence. Management issued upbeat guidance, and CEO Jay Chaudhry said Zscaler’s agentic security tool is gaining momentum. The comments suggest potential for additional growth from newer artificial-intelligence-related security offerings. Zscaler stock soars on earnings beat, upbeat guidance
• Neutral Sentiment: Pre-earnings coverage focused on whether guidance would be the key metric, reflecting Zscaler’s history of being penalized when its forecasts appeared overly conservative. The stronger report and outlook appear to have addressed that concern for now. Bull v. Bear: ZS Faces Low Earnings Bar, Guidance Will be Biggest Metric
• Negative Sentiment: Some analysts had adopted a more cautious stance ahead of the earnings release, creating a risk of disappointment. That concern was a potential headwind, although the earnings beat and upbeat guidance have reduced its immediate impact. Analysts turn cautious ahead of Zscaler’s Q4 print

Analyst Ratings Changes

Several brokerages have commented on ZS. Berenberg Bank set a $200.00 price target on Zscaler in a report on Thursday, May 28th. JPMorgan Chase & Co. boosted their price objective on shares of Zscaler from $205.00 to $215.00 and gave the stock an "overweight" rating in a research note on Wednesday, August 26th. Barclays lifted their target price on shares of Zscaler from $170.00 to $192.00 and gave the stock an "overweight" rating in a report on Tuesday, August 25th. Guggenheim reaffirmed a "buy" rating and issued a $214.00 price target on shares of Zscaler in a research report on Monday, August 24th. Finally, Piper Sandler dropped their price objective on Zscaler from $185.00 to $160.00 and set a "neutral" rating on the stock in a research note on Wednesday, May 27th. Thirty-four equities research analysts have rated the stock with a Buy rating, six have given a Hold rating and one has assigned a Sell rating to the company. Based on data from MarketBeat.com, the company presently has an average rating of "Moderate Buy" and a consensus target price of $213.10.

Insider Transactions at Zscaler

In other Zscaler news, CEO Jagtar Singh Chaudhry sold 2,878 shares of Zscaler stock in a transaction that occurred 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 sale, the chief executive officer directly owned 343,038 shares of the company's stock, valued at approximately $43,370,294.34. The trade was a 0.83% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CFO Kevin Rubin sold 503 shares of the company's stock in a transaction that occurred on Tuesday, August 25th. The shares were sold at an average price of $173.38, for a total value of $87,210.14. Following the completion of the sale, the chief financial officer owned 40,895 shares in the company, valued at approximately $7,090,375.10. This represents a 1.22% decrease in their ownership of the stock. 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 sold a total of 16,772 shares of company stock worth $2,139,799 over the last quarter. 17.20% of the stock is owned by company insiders.

Hedge Funds Weigh In On Zscaler

Several hedge funds and other institutional investors have recently modified their holdings of ZS. Binnacle Investments Inc acquired a new position in Zscaler during the third quarter worth $25,000. AlphaCentric Advisors LLC bought a new stake in shares of Zscaler in the 4th quarter worth about $29,000. Mcguire Capital Advisors Inc. bought a new position in Zscaler during the 4th quarter valued at about $32,000. Strive Financial Group LLC acquired a new position in Zscaler in the fourth quarter valued at about $39,000. Finally, Sumitomo Mitsui Financial Group Inc. raised its stake in shares of Zscaler by 105.5% in the fourth quarter. Sumitomo Mitsui Financial Group Inc. now owns 215 shares of the company's stock valued at $49,000 after acquiring an additional 4,111 shares during the last quarter. Institutional investors own 46.45% of the company's stock.

Zscaler Company Profile

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.

Continue following MarketBeat

Add MarketBeat as your preferred source on Google to see our latest stories in your feed.

Add As Preferred Source