Zscaler (NASDAQ:ZS) Shares Gap Up Following Analyst Upgrade

Key Points

• Zscaler shares jumped after JPMorgan raised its price target from $205 to $215 while maintaining an “overweight” rating; the stock opened at $179.12 versus a prior close of $170.31.
• Analyst sentiment remains favorable, with a consensus “Moderate Buy” rating and an average price target of $216.18 based on 34 Buy, six Hold and one Sell ratings.
• Zscaler’s latest quarterly results exceeded expectations, with revenue rising 25.4% year over year to $850.48 million and adjusted EPS of $1.08 versus the $1.01 consensus estimate, though insiders have sold shares in recent months.

Zscaler, Inc. (NASDAQ:ZS - Get Free Report)'s share price gapped up before the market opened on Thursday after JPMorgan Chase & Co. raised their price target on the stock from $205.00 to $215.00. The stock had previously closed at $170.31, but opened at $179.12. JPMorgan Chase & Co. currently has an overweight rating on the stock. Zscaler shares last traded at $188.7810, with a volume of 596,879 shares trading hands.

Several other equities analysts have also issued reports on ZS. Rosenblatt Securities reissued a "buy" rating and set a $200.00 price objective on shares of Zscaler in a report on Wednesday, June 10th. Stifel Nicolaus boosted their price objective on Zscaler from $175.00 to $200.00 and gave the company a "buy" rating in a report on Wednesday, August 19th. HC Wainwright upgraded Zscaler from a "buy" rating to a "buy" rating in a research report on Monday, May 18th. Citizens Jmp decreased their target price on Zscaler from $290.00 to $210.00 and set a "market outperform" rating on the stock in a research report on Friday, May 1st. Finally, Deutsche Bank Aktiengesellschaft decreased their target price 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. Thirty-four investment analysts have rated the stock with a Buy rating, six have assigned a Hold rating and one has given a Sell rating to the stock. Based on data from MarketBeat.com, the company presently has a consensus rating of "Moderate Buy" and an average price target of $216.18.

Insider Transactions at Zscaler

In other Zscaler news, insider Robert Schlossman sold 3,146 shares of the stock in a transaction that occurred on Tuesday, June 16th. The shares were sold at an average price of $126.43, for a total transaction of $397,748.78. Following the sale, the insider directly owned 69,366 shares in the company, valued at $8,769,943.38. This represents a 4.34% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through this link. 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 shares were sold at an average price of $122.60, for a total value of $345,364.20. Following the completion of the transaction, the insider owned 42,314 shares of the company's stock, valued at approximately $5,187,696.40. This trade represents a 6.24% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last ninety days, insiders have sold 16,772 shares of company stock valued at $2,139,799. Corporate insiders own 17.20% of the company's stock.

More Zscaler News

Here are the key news stories impacting Zscaler this week:

• Positive Sentiment: JPMorgan raised its price target for Zscaler (ZS) from $205 to $215 and maintained an “overweight” rating. The new target implies substantial upside from recent trading levels and signals confidence in Zscaler’s growth outlook. JPMorgan raises Zscaler price target
• Positive Sentiment: Guggenheim reaffirmed its “buy” rating, adding to the generally favorable analyst coverage ahead of earnings. MarketBeat reports a consensus “moderate buy” rating and an average price target of $216.18. Guggenheim reaffirms buy rating
• Positive Sentiment: Zscaler participated in Deep Cogito’s $43 million Series A financing. The investment gives Zscaler exposure to a company developing self-improving artificial intelligence models and may complement its enterprise AI strategy, although it is unlikely to materially affect near-term earnings. Deep Cogito raises Series A
• Neutral Sentiment: Zscaler is expected to report quarterly results Thursday, making the earnings release the main near-term catalyst. Its prior quarter exceeded expectations, with revenue of $850.48 million, up 25.4% year over year, and adjusted earnings of $1.08 per share versus the $1.01 consensus. Zscaler expected to report earnings
• Neutral Sentiment: ZS recently rose while the broader market declined, indicating relative strength; however, investors are likely waiting for management’s guidance on growth, profitability and demand before assigning the stock a new valuation. Zscaler market performance analysis
• Negative Sentiment: Evercore added Zscaler to its tactical “underperform” list ahead of the earnings report, warning that expectations for cybersecurity and AI-related growth may be too high. This creates downside risk if results or guidance disappoint. Evercore adds Zscaler to underperform list
• 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 relatively small, making it a modest sentiment concern rather than a major fundamental signal. Zscaler CFO stock sale

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently made changes to their positions in ZS. Kentucky Retirement Systems Insurance Trust Fund lifted its stake in shares of Zscaler by 1.4% in the 3rd quarter. Kentucky Retirement Systems Insurance Trust Fund now owns 2,569 shares of the company's stock valued at $770,000 after purchasing an additional 36 shares during the period. Parallel Advisors LLC grew its stake in Zscaler by 10.9% during the third quarter. Parallel Advisors LLC now owns 397 shares of the company's stock worth $119,000 after purchasing an additional 39 shares during the period. Smartleaf Asset Management LLC grew its stake in Zscaler by 7.5% during the second quarter. Smartleaf Asset Management LLC now owns 648 shares of the company's stock worth $204,000 after purchasing an additional 45 shares during the period. Larson Financial Group LLC increased its holdings in Zscaler by 2.6% in the third quarter. Larson Financial Group LLC now owns 2,040 shares of the company's stock worth $611,000 after purchasing an additional 52 shares in the last quarter. Finally, Crossmark Global Holdings Inc. increased its holdings in Zscaler by 6.1% in the third quarter. Crossmark Global Holdings Inc. now owns 976 shares of the company's stock worth $292,000 after purchasing an additional 56 shares in the last quarter. 46.45% of the stock is owned by institutional investors and hedge funds.

Zscaler Stock Performance

The company has a quick ratio of 1.86, a current ratio of 1.86 and a debt-to-equity ratio of 0.72. The company has a 50 day simple moving average of $153.75 and a 200-day simple moving average of $149.99. The stock has a market capitalization of $30.60 billion, a price-to-earnings ratio of -393.98, a price-to-earnings-growth ratio of 99.13 and a beta of 0.94.

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

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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