Zscaler (NASDAQ:ZS) Shares Gap Up - Here's What Happened

Key Points

• Zscaler shares jumped sharply, opening at $172.80 versus a prior close of $164.54 and later trading near $180.59.
• Analyst sentiment remains favorable, with 34 Buy ratings, six Holds and two Sells; the stock has a consensus “Moderate Buy” rating and an average price target of $216.53.
• Zscaler exceeded quarterly expectations, reporting $1.19 in earnings per share versus $1.09 expected and $898.19 million in revenue, up 24.9% year over year. Insiders also sold shares primarily to cover tax obligations tied to equity awards.

Shares of Zscaler, Inc. (NASDAQ:ZS - Get Free Report) gapped up before the market opened on Monday . The stock had previously closed at $164.54, but opened at $172.80. Zscaler shares last traded at $180.5910, with a volume of 1,042,948 shares traded.

Analyst Upgrades and Downgrades

A number of equities research analysts recently issued reports on ZS shares. Sanford C. Bernstein dropped their target price on Zscaler from $228.00 to $224.00 and set an "outperform" rating on the stock in a research report on Wednesday, May 27th. UBS Group reduced their price target on Zscaler from $260.00 to $225.00 and set a "buy" rating for the company in a research report on Wednesday, May 27th. Wolfe Research reiterated an "outperform" rating and issued a $150.00 price objective on shares of Zscaler in a report on Thursday, June 11th. Canaccord Genuity Group reissued a "buy" rating and issued a $210.00 price objective on shares of Zscaler in a research report on Friday, September 4th. Finally, Roth Capital restated a "neutral" rating and set a $170.00 target price on shares of Zscaler in a report on Saturday, September 5th. Thirty-four research analysts have rated the stock with a Buy rating, six have issued a Hold rating and two have given a Sell rating to the company. According to data from MarketBeat.com, the stock presently has an average rating of "Moderate Buy" and an average target price of $216.53.

Zscaler Stock Performance

The company has a quick ratio of 1.70, a current ratio of 1.70 and a debt-to-equity ratio of 0.65. The stock has a 50 day simple moving average of $163.38 and a two-hundred day simple moving average of $150.40. The stock has a market capitalization of $30.28 billion, a P/E ratio of -474.24, a P/E/G ratio of 20.42 and a beta of 0.95.

Zscaler (NASDAQ:ZS - Get Free Report) last posted its quarterly earnings results on Thursday, September 3rd. The company reported $1.19 earnings per share for the quarter, topping the consensus estimate 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 firm had revenue of $898.19 million for the quarter, compared to analyst estimates of $876.96 million. During the same quarter in the previous year, the firm earned $0.89 EPS. The business's quarterly revenue was up 24.9% on a year-over-year basis. 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, equities analysts forecast that Zscaler, Inc. will post 0.59 EPS for the current fiscal year.

Insider Activity

In other news, CEO Jagtar Chaudhry sold 2,878 shares of the business's stock in a transaction dated Tuesday, June 16th. The shares were sold at an average price of $126.43, for a total transaction of $363,865.54. Following the transaction, the chief executive officer directly owned 343,038 shares in the company, valued at $43,370,294.34. The trade was a 0.83% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, insider Robert Schlossman sold 3,146 shares of the firm's stock in a transaction dated Tuesday, June 16th. The shares were sold at an average price of $126.43, for a total transaction of $397,748.78. Following the completion of the sale, the insider owned 69,366 shares of the company's stock, valued at $8,769,943.38. This trade represents a 4.34% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders have sold a total of 16,772 shares of company stock valued at $2,139,799 in the last ninety days. Corporate insiders own 17.20% of the company's stock.

Institutional Trading of Zscaler

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

Zscaler Company Profile

Zscaler, Inc is a cloud-native cybersecurity company that provides security services designed to help organizations connect users, devices, applications and workloads securely over the internet. Its platform is built around a zero-trust security model, which verifies access based on identity, context and policy rather than relying primarily on a traditional corporate network perimeter.

The company's offerings include Zscaler Internet Access, which secures access to internet and software-as-a-service applications, and Zscaler Private Access, which provides secure, policy-based access to private applications without requiring conventional virtual private networks.

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