Zscaler (NASDAQ:ZS) Stock Price Up 5.7% - Should You Buy?

Key Points

• Zscaler shares rose 5.7% to approximately $226.68, though trading volume was 87% below the average. Analysts maintain a “Moderate Buy” consensus, with an average price target of $239.44.
• The company reported stronger-than-expected quarterly results, including EPS of $1.19 versus the $1.09 consensus and revenue of $898.19 million, up 24.9% year over year.
• Insiders sold shares worth roughly $11.3 million over the past 90 days, primarily to cover tax obligations tied to equity awards, while institutional investors own 46.45% of the stock.

Zscaler, Inc. (NASDAQ:ZS - Get Free Report) rose 5.7% during mid-day trading on Wednesday. The company traded as high as $228.00 and last traded at $226.6750. 434,072 shares traded hands during trading, a decline of 87% from the average daily volume of 3,323,542 shares. The stock had previously closed at $214.51.

Wall Street Analysts Forecast Growth

ZS has been the subject of a number of recent research reports. Roth Capital reissued a "neutral" rating and issued a $170.00 price objective on shares of Zscaler in a research note on Saturday, September 5th. Wells Fargo & Company upped their target price on Zscaler from $215.00 to $260.00 and gave the stock an "overweight" rating in a report on Wednesday, October 7th. Stephens increased their target price on Zscaler from $225.00 to $265.00 and gave the company an "overweight" rating in a research report on Wednesday, October 7th. Citigroup lifted 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. Finally, Rosenblatt Securities set a $250.00 price target on Zscaler in a research report on Wednesday, October 7th. Thirty-six research analysts have rated the stock with a Buy rating, eight have issued a Hold rating and one has issued a Sell rating to the company. Based on data from MarketBeat.com, the company presently has a consensus rating of "Moderate Buy" and a consensus target price of $239.44.

Zscaler Trading Up 6.6%

The company has a 50 day moving average of $193.44 and a two-hundred day moving average of $161.22. 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 stock has a market capitalization of $37.30 billion, a PE ratio of -586.15, a P/E/G ratio of 20.42 and a beta of 0.94.

Zscaler (NASDAQ:ZS - Get Free Report) last posted its quarterly earnings data on Thursday, September 3rd. The company reported $1.19 earnings per share (EPS) for the quarter, beating the consensus estimate of $1.09 by $0.10. Zscaler had a negative net margin of 1.88% and a positive return on equity of 1.23%. The firm had revenue of $898.19 million for the quarter, compared to the consensus estimate of $876.96 million. During the same quarter in the prior year, the company posted $0.89 earnings per share. The company's revenue for the quarter 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. Sell-side analysts predict that Zscaler, Inc. will post 0.69 EPS for the current year.

Insider Activity

In other Zscaler news, CFO Kevin Rubin sold 5,957 shares of Zscaler stock in a transaction on Wednesday, September 16th. The shares were sold at an average price of $192.76, for a total value of $1,148,271.32. Following the completion of the transaction, the chief financial officer owned 43,287 shares of the company's stock, valued at approximately $8,344,002.12. The trade was a 12.10% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this link. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CEO Jagtar Chaudhry sold 2,852 shares of Zscaler stock in a transaction on Wednesday, September 16th. The shares were sold at an average price of $192.76, for a total transaction of $549,751.52. Following the completion of the transaction, the chief executive officer directly owned 340,186 shares of the company's stock, valued at $65,574,253.36. The trade was a 0.83% decrease in their position. 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. In the last 90 days, insiders have sold 54,053 shares of company stock valued at $11,256,876. 17.20% of the stock is currently owned by company insiders.

Institutional Investors Weigh In On Zscaler

Several hedge funds have recently modified their holdings of the company. Burkett Financial Services LLC purchased a new stake in shares of Zscaler during the third quarter valued at approximately $27,000. Activest Wealth Management boosted its stake in shares of Zscaler by 1,281.8% in the third quarter. Activest Wealth Management now owns 152 shares of the company's stock valued at $30,000 after purchasing an additional 141 shares during the period. POM Investment Strategies LLC boosted its stake in shares of Zscaler by 92.9% in the second quarter. POM Investment Strategies LLC now owns 218 shares of the company's stock valued at $31,000 after purchasing an additional 105 shares during the period. Elevation Wealth Partners LLC grew its holdings in Zscaler by 84.3% during the 3rd quarter. Elevation Wealth Partners LLC now owns 153 shares of the company's stock valued at $31,000 after purchasing an additional 70 shares in the last quarter. Finally, Fortitude Family Office LLC grew its holdings in Zscaler by 2,466.7% during the 3rd quarter. Fortitude Family Office LLC now owns 154 shares of the company's stock valued at $31,000 after purchasing an additional 148 shares in the last quarter. 46.45% of the stock is owned by hedge funds and other institutional investors.

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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