Scotiabank Has Lowered Expectations for Zscaler (NASDAQ:ZS) Stock Price

Key Points

• Scotiabank has lowered its price target for Zscaler from $360.00 to $334.00, maintaining a "sector outperform" rating, which suggests a potential upside of 26.07% from the stock's previous close.
• Zscaler reported earnings of $0.89 per share for the quarter, surpassing estimates, and its revenue increased by 21.3% year-over-year, totaling $719.23 million.
• Despite the recent downgrade, a mix of ratings from other brokerages includes several "buy" ratings, indicating a consensus average target price of $303.17 for the stock.

Zscaler (NASDAQ:ZS - Get Free Report) had its price target decreased by analysts at Scotiabank from $360.00 to $334.00 in a research report issued to clients and investors on Wednesday,Benzinga reports. The brokerage presently has a "sector outperform" rating on the stock. Scotiabank's price objective suggests a potential upside of 26.07% from the stock's previous close.

Several other brokerages have also recently issued reports on ZS. JMP Securities reaffirmed a "market outperform" rating and set a $355.00 price objective on shares of Zscaler in a report on Wednesday. Guggenheim reiterated a "neutral" rating on shares of Zscaler in a research note on Friday, May 30th. Mizuho boosted their price target on Zscaler from $275.00 to $290.00 and gave the company a "neutral" rating in a research report on Wednesday, June 4th. Needham & Company LLC reaffirmed a "buy" rating and issued a $350.00 target price on shares of Zscaler in a research report on Wednesday. Finally, BTIG Research restated a "buy" rating on shares of Zscaler in a research note on Thursday, July 10th. One investment analyst has rated the stock with a Strong Buy rating, twenty-nine have given a Buy rating and seven have assigned a Hold rating to the stock. Based on data from MarketBeat.com, the company presently has an average rating of "Moderate Buy" and a consensus target price of $303.17.

Zscaler Stock Down 3.5%

ZS opened at $264.92 on Wednesday. The firm has a market cap of $41.25 billion, a price-to-earnings ratio of -1,020.73, a price-to-earnings-growth ratio of 259.58 and a beta of 1.05. Zscaler has a 52 week low of $153.45 and a 52 week high of $318.46. The business's 50 day moving average is $287.86 and its two-hundred day moving average is $249.96.

Zscaler (NASDAQ:ZS - Get Free Report) last announced its earnings results on Tuesday, September 2nd. The company reported $0.89 earnings per share for the quarter, beating the consensus estimate of $0.80 by $0.09. Zscaler had a negative return on equity of 0.59% and a negative net margin of 1.52%.The company had revenue of $719.23 million for the quarter, compared to the consensus estimate of $707.15 million. During the same period last year, the business posted $0.88 EPS. The company's revenue was up 21.3% on a year-over-year basis. Zscaler has set its FY 2026 guidance at 3.640-3.680 EPS. Q1 2026 guidance at 0.850-0.860 EPS. Equities analysts expect that Zscaler will post -0.1 EPS for the current fiscal year.

Insider Activity

In other Zscaler news, EVP Raj Judge sold 2,957 shares of Zscaler stock in a transaction on Tuesday, June 17th. The shares were sold at an average price of $303.70, for a total transaction of $898,040.90. Following the completion of the sale, the executive vice president owned 76,289 shares of the company's stock, valued at approximately $23,168,969.30. The trade was a 3.73% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. Also, CEO Jagtar Singh Chaudhry sold 2,849 shares of Zscaler stock in a transaction on Tuesday, June 17th. The stock was sold at an average price of $303.70, for a total transaction of $865,241.30. Following the sale, the chief executive officer directly owned 353,565 shares of the company's stock, valued at $107,377,690.50. This represents a 0.80% decrease in their position. The disclosure for this sale can be found here. In the last ninety days, insiders have sold 143,305 shares of company stock worth $43,199,936. Corporate insiders own 18.10% of the company's stock.

Institutional Inflows and Outflows

Hedge funds have recently modified their holdings of the company. GAMMA Investing LLC lifted its position in Zscaler by 43.1% during the 1st quarter. GAMMA Investing LLC now owns 641 shares of the company's stock worth $127,000 after buying an additional 193 shares in the last quarter. Allworth Financial LP raised its holdings in shares of Zscaler by 47.4% in the 1st quarter. Allworth Financial LP now owns 1,002 shares of the company's stock valued at $211,000 after purchasing an additional 322 shares during the period. Krane Funds Advisors LLC raised its holdings in shares of Zscaler by 36.4% in the 1st quarter. Krane Funds Advisors LLC now owns 1,667 shares of the company's stock valued at $331,000 after purchasing an additional 445 shares during the period. Merit Financial Group LLC raised its holdings in shares of Zscaler by 42.0% in the 1st quarter. Merit Financial Group LLC now owns 6,197 shares of the company's stock valued at $1,230,000 after purchasing an additional 1,832 shares during the period. Finally, National Pension Service raised its holdings in shares of Zscaler by 11.2% in the 1st quarter. National Pension Service now owns 171,847 shares of the company's stock valued at $34,098,000 after purchasing an additional 17,342 shares during the period. 46.45% of the stock is currently owned by institutional investors.

About Zscaler

Zscaler, Inc operates as a cloud security company worldwide. The company offers Zscaler Internet Access solution that provides users, workloads, IoT, and OT devices secure access to externally managed applications, including software-as-a-service (SaaS) applications and internet destinations; and Zscaler Private Access solution, which is designed to provide access to managed applications hosted internally in data centers, and private or public clouds.

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