Zscaler (NASDAQ:ZS) Shares Gap Down - What's Next?

Key Points

• Zscaler shares gapped down from a prior close of $255.80 to open at $235.51, later trading near $251.36.
• Analyst sentiment remains positive, with a consensus “Moderate Buy” rating from 46 analysts and an average price target of $240.14, despite one neutral rating from DA Davidson.
• The company beat quarterly expectations, reporting $1.19 in adjusted EPS and $898.19 million in revenue, up 24.9% year over year; insiders have nevertheless sold $11.3 million of stock over the past 90 days.

Zscaler, Inc. (NASDAQ:ZS - Get Free Report) shares gapped down prior to trading on Thursday. The stock had previously closed at $255.80, but opened at $235.51. Zscaler shares last traded at $251.3570, with a volume of 627,849 shares trading hands.

Analyst Ratings Changes

A number of analysts have commented on the stock. DA Davidson began coverage on shares of Zscaler in a report on Wednesday, October 21st. They set a "neutral" rating and a $215.00 target price for the company. Citigroup boosted their price target on Zscaler from $245.00 to $260.00 and gave the company a "buy" rating in a report on Thursday, October 15th. Needham & Company LLC upped their price objective on Zscaler from $215.00 to $255.00 and gave the stock a "buy" rating in a research report on Wednesday, October 7th. TD Cowen increased their price objective on Zscaler from $200.00 to $230.00 and gave the stock a "buy" rating in a report on Wednesday, October 7th. Finally, Guggenheim lifted their target price on Zscaler from $214.00 to $254.00 and gave the company a "buy" rating in a research report on Wednesday, October 7th. Thirty-seven analysts have rated the stock with a Buy rating, eight have issued a Hold rating and one has given 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 $240.14.

Zscaler Price Performance

The company has a debt-to-equity ratio of 0.65, a quick ratio of 1.70 and a current ratio of 1.70. The company has a fifty day moving average price of $201.67 and a two-hundred day moving average price of $167.35. The company has a market cap of $39.71 billion, a P/E ratio of -624.30, a PEG ratio of 24.52 and a beta of 0.94.

Zscaler (NASDAQ:ZS - Get Free Report) last announced its quarterly earnings data on Thursday, September 3rd. The company reported $1.19 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $1.09 by $0.10. Zscaler had a positive return on equity of 1.23% and a negative net margin of 1.88%. The company had revenue of $898.19 million for the quarter, compared to analysts' expectations of $876.96 million. During the same quarter in the prior year, the business posted $0.89 EPS. The business's revenue was up 24.9% compared to the same quarter last year. Zscaler has set its FY 2027 guidance at 4.860-4.900 EPS and its Q1 2027 guidance at 1.150-1.160 EPS. On average, sell-side analysts anticipate that Zscaler, Inc. will post 0.69 earnings per share for the current fiscal year.

Insider Activity

In other news, insider Adam Geller sold 1,042 shares of the business's stock in a transaction dated Monday, October 12th. The shares were sold at an average price of $235.95, for a total transaction of $245,859.90. Following the transaction, the insider directly owned 38,308 shares in the company, valued at $9,038,772.60. The trade was a 2.65% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director James Beer sold 177 shares of the company's stock in a transaction dated Thursday, September 17th. The shares were sold at an average price of $192.01, for a total transaction of $33,985.77. Following the completion of the sale, the director directly owned 4,030 shares in the company, valued at approximately $773,800.30. The trade was a 4.21% 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 ninety days, insiders have sold 54,064 shares of company stock worth $11,316,078. 17.20% of the stock is owned by insiders.

Institutional Trading of Zscaler

Institutional investors and hedge funds have recently bought and sold shares of the business. Handelsbanken Fonder AB boosted its stake in shares of Zscaler by 89.6% during the second quarter. Handelsbanken Fonder AB now owns 60,933 shares of the company's stock valued at $8,601,000 after purchasing an additional 28,792 shares in the last quarter. Assenagon Asset Management S.A. raised its holdings in Zscaler by 6.6% in the 2nd quarter. Assenagon Asset Management S.A. now owns 193,297 shares of the company's stock valued at $27,284,000 after buying an additional 11,941 shares during the last quarter. Bank of America Corp DE raised its holdings in Zscaler by 44.3% in the 1st quarter. Bank of America Corp DE now owns 779,245 shares of the company's stock valued at $109,320,000 after buying an additional 239,326 shares during the last quarter. Danica Pension Livsforsikringsaktieselskab bought a new position in Zscaler in the 2nd quarter valued at approximately $11,232,000. Finally, Krilogy Financial LLC boosted its position in Zscaler by 163.0% during the 3rd quarter. Krilogy Financial LLC now owns 11,008 shares of the company's stock worth $2,195,000 after buying an additional 6,822 shares during the period. Institutional investors own 46.45% of the company's stock.

Zscaler Company Profile

Zscaler, Inc is a cloud-based cybersecurity company that helps organizations secure access to applications, websites, data and other digital resources. Its platform is designed around a zero-trust security model, which verifies users and devices and enforces security policies before granting access, rather than relying primarily on a traditional corporate network perimeter.

The company's offerings include Zscaler Internet Access, which provides secure access to internet and software-as-a-service applications, and Zscaler Private Access, which enables secure access to private applications without extending an organization's network to users.

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