Zscaler (NASDAQ:ZS) Shares Down 5.5% - Should You Sell?

Key Points

• Zscaler shares fell 5.5% to about $178 in Tuesday trading, on volume 77% below the average daily level.
• Analysts lowered several price targets, but sentiment remains broadly positive: 34 analysts rate the stock Buy, six Hold, and one Sell. The consensus rating is Moderate Buy, with a $216.18 average price target.
• Insiders sold 16,772 shares worth approximately $2.14 million over the past 90 days, while institutional investors own 46.45% of Zscaler’s stock.

Zscaler, Inc. (NASDAQ:ZS - Get Free Report)'s stock price dropped 5.5% during trading on Tuesday . The company traded as low as $178.15 and last traded at $178.0670. Approximately 775,379 shares were traded during trading, a decline of 77% from the average daily volume of 3,315,786 shares. The stock had previously closed at $188.38.

Analysts Set New Price Targets

A number of brokerages recently weighed in on ZS. Piper Sandler reduced their target price on shares of Zscaler from $185.00 to $160.00 and set a "neutral" rating for the company in a research note on Wednesday, May 27th. Deutsche Bank Aktiengesellschaft lowered their price target on shares of Zscaler from $185.00 to $175.00 and set a "buy" rating on the stock in a research note on Wednesday, May 27th. BMO Capital Markets decreased their target price on shares of Zscaler from $210.00 to $178.00 and set an "outperform" rating for the company in a research note on Wednesday, May 27th. B. Riley Financial dropped their price objective on shares of Zscaler from $225.00 to $215.00 and set a "buy" rating on the stock in a research report on Wednesday, May 27th. Finally, Weiss Ratings upgraded Zscaler from a "sell (e+)" rating to a "sell (d-)" rating in a research note on Thursday. Thirty-four investment analysts have rated the stock with a Buy rating, six have given a Hold rating and one has issued a Sell rating to the company. According to data from MarketBeat.com, Zscaler currently has a consensus rating of "Moderate Buy" and a consensus price target of $216.18.

Zscaler Trading Down 5.5%

The firm's fifty day simple moving average is $157.48 and its 200 day simple moving average is $150.33. The stock has a market capitalization of $28.79 billion, a P/E ratio of -370.91, a price-to-earnings-growth ratio of 108.43 and a beta of 0.94. The company has a debt-to-equity ratio of 0.72, a quick ratio of 1.86 and a current ratio of 1.86.

Insider Activity

In other news, CEO Jagtar Singh Chaudhry sold 2,878 shares of Zscaler stock in a transaction 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 transaction, the chief executive officer owned 343,038 shares in the company, valued at approximately $43,370,294.34. This trade represents a 0.83% decrease in their position. The sale was disclosed in a document filed with the SEC, which is accessible through 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 the business's 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 $5,187,696.40. This trade represents a 6.24% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last ninety days, insiders sold 16,772 shares of company stock valued at $2,139,799. 17.20% of the stock is owned by insiders.

Institutional Inflows and Outflows

Several institutional investors have recently bought and sold shares of ZS. Integrated Wealth Concepts LLC increased its holdings in shares of Zscaler by 19.9% during the first quarter. Integrated Wealth Concepts LLC now owns 1,439 shares of the company's stock worth $285,000 after buying an additional 239 shares in the last quarter. NewEdge Advisors LLC increased its holdings in Zscaler by 8.2% in the 1st quarter. NewEdge Advisors LLC now owns 4,899 shares of the company's stock worth $972,000 after purchasing an additional 370 shares in the last quarter. Empowered Funds LLC raised its position in Zscaler by 9.2% in the first quarter. Empowered Funds LLC now owns 2,811 shares of the company's stock valued at $558,000 after purchasing an additional 238 shares during the last quarter. Sivia Capital Partners LLC acquired a new stake in shares of Zscaler during the second quarter valued at about $252,000. Finally, Jump Financial LLC acquired a new stake in shares of Zscaler during the second quarter valued at about $3,019,000. Institutional investors and hedge funds 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.

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