Scotiabank Lowers Zscaler (NASDAQ:ZS) Price Target to $175.00

Key Points

• Scotiabank cut its price target on Zscaler from $190 to $175, while keeping a sector outperform rating. The new target implies about 5.2% downside from the previous close.
• Zscaler recently reported better-than-expected quarterly results, with earnings of $1.08 per share and revenue of $850.5 million, both above estimates. Revenue also rose 25.4% year over year, and the company raised its FY26 guidance.
• Despite the strong earnings, analyst sentiment has been mixed as several firms trimmed targets, though the broader consensus remains Moderate Buy with an average price target of $234.91. The stock has also seen notable insider selling in recent months.

Zscaler (NASDAQ:ZS - Get Free Report) had its target price cut by research analysts at Scotiabank from $190.00 to $175.00 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 target suggests a potential downside of 5.20% from the stock's previous close.

A number of other research firms have also recently weighed in on ZS. Sanford C. Bernstein lowered their price target on shares of Zscaler from $228.00 to $224.00 and set an "outperform" rating on the stock in a research note on Wednesday. Citizens Jmp lowered their target price on shares of Zscaler from $290.00 to $210.00 and set a "market outperform" rating on the stock in a research report on Friday, May 1st. UBS Group reiterated a "buy" rating on shares of Zscaler in a research report on Wednesday, May 20th. KeyCorp boosted their price target on Zscaler from $160.00 to $190.00 and gave the stock an "overweight" rating in a research note on Monday, May 18th. Finally, The Goldman Sachs Group restated a "neutral" rating and issued a $179.00 price target on shares of Zscaler in a report on Wednesday. Two investment analysts have rated the stock with a Strong Buy rating, twenty-nine have given a Buy rating, seven have assigned a Hold rating and three have assigned a Sell rating to the company's stock. According to MarketBeat.com, the stock currently has an average rating of "Moderate Buy" and an average price target of $234.91.

Zscaler Price Performance

Shares of ZS opened at $184.60 on Wednesday. The company has a current ratio of 1.90, a quick ratio of 1.90 and a debt-to-equity ratio of 0.78. The stock's 50 day moving average is $145.75 and its two-hundred day moving average is $192.65. Zscaler has a twelve month low of $114.63 and a twelve month high of $336.99. The firm has a market capitalization of $29.68 billion, a PE ratio of -439.52 and a beta of 0.96.

Zscaler (NASDAQ:ZS - Get Free Report) last posted its quarterly earnings results on Tuesday, May 26th. The company reported $1.08 earnings per share for the quarter, beating analysts' consensus estimates of $1.01 by $0.07. Zscaler had a positive return on equity of 0.06% and a negative net margin of 2.25%.The firm had revenue of $850.48 million for the quarter, compared to the consensus estimate of $835.60 million. During the same period in the previous year, the business earned $0.84 earnings per share. The company's revenue for the quarter was up 25.4% compared to the same quarter last year. Zscaler has set its Q4 2026 guidance at 1.080-1.090 EPS and its FY 2026 guidance at 4.100-4.110 EPS. Research analysts anticipate that Zscaler will post -0.03 earnings per share for the current year.

Insider Buying and Selling at Zscaler

In other Zscaler news, insider Robert Schlossman sold 2,263 shares of the firm's stock in a transaction on Tuesday, March 17th. The stock was sold at an average price of $156.59, for a total transaction of $354,363.17. Following the completion of the transaction, the insider owned 72,390 shares of the company's stock, valued at approximately $11,335,550.10. This trade represents a 3.03% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is accessible through this link. Also, CFO Kevin Rubin sold 1,682 shares of the company's stock in a transaction on Tuesday, March 17th. The shares were sold at an average price of $156.59, for a total value of $263,384.38. Following the completion of the sale, the chief financial officer owned 46,479 shares in the company, valued at $7,278,146.61. This represents a 3.49% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Over the last 90 days, insiders sold 12,130 shares of company stock worth $1,892,487. 17.20% of the stock is currently owned by insiders.

Institutional Inflows and Outflows

Institutional investors and hedge funds have recently added to or reduced their stakes in the company. Vanguard Group Inc. lifted its stake in shares of Zscaler by 0.5% during the fourth quarter. Vanguard Group Inc. now owns 11,423,424 shares of the company's stock valued at $2,569,357,000 after buying an additional 55,521 shares during the period. Groupama Asset Managment lifted its stake in shares of Zscaler by 76,352.6% during the 3rd quarter. Groupama Asset Managment now owns 4,750,000 shares of the company's stock worth $1,423,385,000 after purchasing an additional 4,743,787 shares during the period. First Trust Advisors LP boosted its holdings in shares of Zscaler by 36.2% during the first quarter. First Trust Advisors LP now owns 3,518,678 shares of the company's stock worth $493,635,000 after purchasing an additional 935,781 shares during the last quarter. Price T Rowe Associates Inc. MD grew its position in shares of Zscaler by 43.3% in the fourth quarter. Price T Rowe Associates Inc. MD now owns 2,572,358 shares of the company's stock valued at $578,576,000 after purchasing an additional 777,414 shares during the period. Finally, State Street Corp increased its stake in Zscaler by 3.4% in the fourth quarter. State Street Corp now owns 2,337,604 shares of the company's stock valued at $525,774,000 after purchasing an additional 77,800 shares during the last quarter. 46.45% of the stock is currently owned by hedge funds and other institutional investors.

Zscaler News Roundup

Here are the key news stories impacting Zscaler this week:

• Positive Sentiment: Zscaler reported fiscal Q3 revenue of $850.5 million and EPS of $1.08, both above estimates, while revenue rose 25% year over year and ARR also grew 25%, reinforcing the company’s strong core demand. Article: Zscaler Announces Strong Third-Quarter Fiscal 2026 Results
• Positive Sentiment: Management raised FY26 guidance and pointed to strength in AI security and record margins, which supports the long-term growth narrative for the cybersecurity platform. Article: ZS Q3 Earnings Call Flags Prudent Growth Outlook
• Positive Sentiment: Several analysts still view the stock favorably despite trimming targets, with Rosenblatt, Bernstein, Baird, and Needham maintaining bullish or buy-equivalent ratings, suggesting Wall Street still sees upside from current levels. Article: Analyst target updates
• Neutral Sentiment: New commentary on Zscaler’s AI security strategy and product expansion adds to the growth story, but also notes the stock may still need stronger execution to justify its valuation. Article: As Zscaler Doubles Down on AI Security, ZS Stock Still Needs More to Justify Its Steep Valuation
• Negative Sentiment: Despite the beat, Zscaler’s guidance disappointed traders: the company forecast fourth-quarter revenue slightly below estimates, and Reuters said the outlook reflected intensifying competition in cybersecurity and more cautious enterprise spending. Article: Zscaler sees downbeat quarterly revenue as competition heats up in cybersecurity market
• Negative Sentiment: Some recent analyst notes turned more cautious, including a Seeking Alpha downgrade citing slowing organic growth, weaker net-new ARR momentum, and competitive pressure from integrated security platforms. Article: Zscaler Q1: I Was Right (Rating Downgrade)

Zscaler Company Profile

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.

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