Needham & Company LLC Reiterates Buy Rating for Zscaler (NASDAQ:ZS)

Key Points

• Needham & Company LLC reiterated a Buy rating on Zscaler and set a $180 price target, implying about 43% upside from the stock’s current price.
• Zscaler’s latest quarter topped expectations, with EPS of $1.08 and revenue of $850.48 million, while revenue grew 25.4% year over year.
• The company is leaning into AI security with new products and partnerships, including AI Broker and Endpoint AI Security, as it positions itself to protect enterprise AI workflows.

Zscaler (NASDAQ:ZS - Get Free Report)'s stock had its "buy" rating restated by stock analysts at Needham & Company LLC in a note issued to investors on Wednesday,Benzinga reports. They presently have a $180.00 price target on the stock. Needham & Company LLC's price objective would suggest a potential upside of 43.04% from the stock's current price.

A number of other equities research analysts have also weighed in on the stock. B. Riley Financial reduced their target price on shares of Zscaler from $225.00 to $215.00 and set a "buy" rating on the stock in a report on Wednesday, May 27th. BTIG Research restated a "neutral" rating on shares of Zscaler in a report on Thursday, April 9th. Wells Fargo & Company reduced their price target on shares of Zscaler from $210.00 to $180.00 and set an "overweight" rating for the company in a research report on Thursday, May 28th. Citizens Jmp lowered their target price on shares of Zscaler from $290.00 to $210.00 and set a "market outperform" rating on the stock in a report on Friday, May 1st. Finally, KeyCorp upped their target price on shares of Zscaler from $160.00 to $190.00 and gave the stock an "overweight" rating in a research note on Monday, May 18th. Thirty-three analysts have rated the stock with a Buy rating, six have issued a Hold rating and one has issued a Sell rating to the company's stock. According to data from MarketBeat, Zscaler presently has an average rating of "Moderate Buy" and an average price target of $216.03.

Zscaler Price Performance

NASDAQ:ZS opened at $125.84 on Wednesday. Zscaler has a 52 week low of $114.63 and a 52 week high of $336.99. The company has a debt-to-equity ratio of 0.72, a quick ratio of 1.86 and a current ratio of 1.86. The firm's 50-day simple moving average is $143.22 and its 200 day simple moving average is $180.32. The firm has a market cap of $20.35 billion, a price-to-earnings ratio of -262.16, a P/E/G ratio of 80.81 and a beta of 0.97.

Zscaler (NASDAQ:ZS - Get Free Report) last posted its quarterly earnings data on Tuesday, May 26th. The company reported $1.08 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $1.01 by $0.07. Zscaler had a negative net margin of 2.44% and a negative return on equity of 0.37%. The firm had revenue of $850.48 million during the quarter, compared to the consensus estimate of $835.14 million. During the same quarter in the previous year, the firm posted $0.84 EPS. The business's revenue for the quarter 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 predict that Zscaler will post 0.11 earnings per share for the current year.

Insider Buying and Selling at Zscaler

In other Zscaler news, CFO Kevin Rubin sold 1,682 shares of the firm's stock in a transaction on Tuesday, March 17th. The shares were sold at an average price of $156.59, for a total value of $263,384.38. Following the sale, the chief financial officer owned 46,479 shares of the company's stock, valued at $7,278,146.61. This trade represents a 3.49% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, EVP Raj Judge sold 2,488 shares of the company's 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 transaction, the executive vice president directly owned 67,906 shares of the company's stock, valued at approximately $10,633,400.54. This trade represents a 3.53% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Over the last quarter, insiders sold 12,130 shares of company stock valued at $1,892,487. 17.20% of the stock is currently owned by insiders.

Institutional Trading of Zscaler

Several large investors have recently added to or reduced their stakes in the stock. Groupama Asset Managment lifted its position in shares of 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 during the period. First Trust Advisors LP raised its stake 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 buying an additional 935,781 shares in the last quarter. Price T Rowe Associates Inc. MD lifted its holdings 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 worth $578,576,000 after buying an additional 777,414 shares during the period. AQR Capital Management LLC boosted its position in Zscaler by 61.8% during the 3rd 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 in the last quarter. Finally, Pictet Asset Management Holding SA grew its holdings in shares of Zscaler by 52.5% during the 1st quarter. Pictet Asset Management Holding SA now owns 1,920,540 shares of the company's stock worth $269,285,000 after acquiring an additional 661,413 shares during the period. Institutional investors own 46.45% of the company's stock.

Key Headlines Impacting Zscaler

Here are the key news stories impacting Zscaler this week:

• Positive Sentiment: Zscaler unveiled new AI-security products, including AI Broker and Endpoint AI Security, to protect AI agents, endpoints, and enterprise data as more workflows shift to agentic AI. Zscaler Unveils New Product Innovations to Secure Agentic AI
• Positive Sentiment: The company expanded Project AI-Guardian with partners including AWS, Google Cloud, OpenAI, Databricks, CoreWeave, Equinix, Glean, NTT DATA, and Saviynt, which could strengthen Zscaler’s position as an AI security platform and improve adoption. Zscaler Expands AI-Guardian, Uniting Tech Giants to Secure Enterprise AI at Scale
• Positive Sentiment: Zscaler’s CEO argued that AI will create “billions of agents” that need cybersecurity protection, reinforcing the bull case that ZS can benefit from the rise of autonomous AI workflows. Zscaler CEO: AI Will Create ‘Billions of Agents’ That Need Cybersecurity Protection
• Neutral Sentiment: Zscaler’s new products and partnership announcements highlight strong strategic momentum, but the releases also include forward-looking caveats about customer adoption and execution risk. Zscaler Unveils New Product Innovations to Secure Agentic AI
• Negative Sentiment: Broader market reaction to Anthropic’s new models pressured cybersecurity and software names, including Zscaler, on concern that the competitive AI landscape could shift investor sentiment away from the group. Zscaler, Dynatrace, and Nutanix Shares Are Falling, What You Need To Know
• Negative Sentiment: New class-action deadline reminders and a separate fraud investigation notice add legal overhang for ZS shares. ZS DEADLINE: The Gross Law Firm Reminds Zscaler, Inc. Investors of Upcoming Securities Class Action Deadline

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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