North Star Asset Management Inc. Invests $5.41 Million in Zscaler, Inc. $ZS

Key Points

• North Star Asset Management initiated a $5.41 million position in Zscaler, buying 38,306 shares during the second quarter. Institutional investors and hedge funds collectively own 46.45% of the company.
• Analyst sentiment remains broadly positive, with 34 Buy ratings, six Holds and one Sell rating; the consensus rating is “Moderate Buy” with an average price target of $216.18.
• Zscaler exceeded quarterly expectations, reporting $1.08 in EPS versus the $1.01 consensus and $850.48 million in revenue, up 25.4% year over year. However, the stock’s high valuation and recent insider selling remain potential risks.

North Star Asset Management Inc. bought a new position in shares of Zscaler, Inc. (NASDAQ:ZS - Free Report) in the 2nd quarter, according to the company in its most recent Form 13F filing with the Securities and Exchange Commission (SEC). The firm bought 38,306 shares of the company's stock, valued at approximately $5,407,000.

A number of other institutional investors have also made changes to their positions in ZS. BlackRock Inc. purchased a new stake in Zscaler in the second quarter valued at approximately $1,396,028,000. First Trust Advisors LP grew its position in Zscaler by 36.2% in the 1st quarter. First Trust Advisors LP now owns 3,518,678 shares of the company's stock valued at $493,635,000 after acquiring an additional 935,781 shares in the last quarter. Price T Rowe Associates Inc. MD grew its position in Zscaler by 43.3% in the 4th 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 in the last quarter. AQR Capital Management LLC increased its stake in Zscaler by 61.8% during the third 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 period. Finally, Connor Clark & Lunn Investment Management Ltd. purchased a new stake in Zscaler during the 2nd quarter worth approximately $102,271,000. 46.45% of the stock is currently owned by institutional investors and hedge funds.

Analyst Upgrades and Downgrades

ZS has been the topic of several recent research reports. Canaccord Genuity Group restated a "buy" rating and set a $210.00 price target on shares of Zscaler in a report on Thursday, June 11th. Piper Sandler cut their price target on shares of Zscaler from $185.00 to $160.00 and set a "neutral" rating on the stock in a research note on Wednesday, May 27th. Stifel Nicolaus upped their price objective on shares of Zscaler from $175.00 to $200.00 and gave the company a "buy" rating in a research note on Wednesday, August 19th. FBN Securities restated an "outperform" rating and issued a $175.00 price objective on shares of Zscaler in a research note on Wednesday, May 27th. Finally, Wolfe Research reaffirmed an "outperform" rating and set a $150.00 price objective on shares of Zscaler in a report on Thursday, June 11th. Thirty-four equities research analysts have rated the stock with a Buy rating, six have assigned a Hold rating and one has given a Sell rating to the company. According to data from MarketBeat, the stock has an average rating of "Moderate Buy" and an average price target of $216.18.

Zscaler Stock Performance

Shares of Zscaler stock opened at $187.30 on Friday. The company has a debt-to-equity ratio of 0.72, a current ratio of 1.86 and a quick ratio of 1.86. The stock has a market capitalization of $30.29 billion, a price-to-earnings ratio of -390.20, a PEG ratio of 100.24 and a beta of 0.94. Zscaler, Inc. has a 12 month low of $114.63 and a 12 month high of $336.99. The firm's fifty day simple moving average is $155.00 and its 200-day simple moving average is $150.13.

Zscaler (NASDAQ:ZS - Get Free Report) last released its quarterly earnings results on Tuesday, May 26th. The company reported $1.08 EPS for the quarter, topping the consensus estimate of $1.01 by $0.07. The business had revenue of $850.48 million during the quarter, compared to analysts' expectations of $835.14 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 25.4% compared to the same quarter last year. During the same quarter in the prior year, the business earned $0.84 earnings per share. As a group, equities analysts forecast that Zscaler, Inc. will post 0.13 earnings per share for the current year.

Insider Transactions at Zscaler

In related news, CEO Jagtar Singh Chaudhry sold 2,878 shares of the firm's stock in a transaction that occurred on Tuesday, June 16th. The stock was sold at an average price of $126.43, for a total value of $363,865.54. Following the completion of the transaction, the chief executive officer directly owned 343,038 shares of the company's stock, valued at $43,370,294.34. This trade represents a 0.83% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available at 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 Zscaler stock in a transaction 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 directly owned 42,314 shares of the company's stock, valued at approximately $5,187,696.40. This represents a 6.24% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last 90 days, insiders have sold 16,772 shares of company stock worth $2,139,799. 17.20% of the stock is currently owned by insiders.

Trending Headlines about Zscaler

Here are the key news stories impacting Zscaler this week:

• Positive Sentiment: A broad cybersecurity-sector re-rating lifted Zscaler and other previously underperforming security stocks. The First Trust NASDAQ Cybersecurity ETF also advanced strongly, suggesting investors are buying the group rather than focusing only on ZS. Cybersecurity sector re-rating
• Positive Sentiment: J.P. Morgan assigned Zscaler a “buy” or “overweight” view and raised its price target from $205 to $215. The higher target reinforces expectations for additional upside and was a direct bullish catalyst. J.P. Morgan upgrades Zscaler
• Positive Sentiment: Zscaler participated in Deep Cogito’s $43 million Series A financing. The investment provides exposure to a developer of self-improving AI models and supports Zscaler’s broader enterprise-AI positioning, although it is unlikely to materially affect near-term earnings. Deep Cogito financing
• Neutral Sentiment: Investors are awaiting Zscaler’s quarterly earnings announcement. The company previously exceeded consensus estimates for earnings and revenue, but the upcoming report must validate expectations for continued growth in cloud security and AI-related demand. Zscaler earnings announcement
• Negative Sentiment: Evercore placed Zscaler on its tactical “underperform” list ahead of results, indicating that valuation and elevated growth expectations could create downside risk if the earnings outlook disappoints. Evercore underperform view
• Negative Sentiment: CFO Kevin Rubin sold 503 shares worth approximately $87,210 under a pre-arranged Rule 10b5-1 plan. The sale reduced his holdings by about 1.2% and is a modest negative signal, though the planned nature and small size limit its significance. Zscaler CFO stock sale

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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