Short Interest in Zscaler, Inc. (NASDAQ:ZS) Increases By 28.3%

Key Points

• Short interest in Zscaler rose 28.3% in April to 10,509,226 shares, equal to about 7.9% of the company's shares and a days-to-cover ratio of 3.2.
• Several analysts have cut price targets (e.g., Needham to $180, Morgan Stanley to $155), but the consensus rating is a Moderate Buy with an average price target of $265.74.
• Zscaler beat the quarter with $1.01 EPS and $815.75M revenue (up 25.9% year-over-year) and issued Q3 and FY2026 EPS guidance of 1.000–1.010 and 3.990–4.020, respectively.

Zscaler, Inc. (NASDAQ:ZS - Get Free Report) saw a large increase in short interest in the month of April. As of April 15th, there was short interest totaling 10,509,226 shares, an increase of 28.3% from the March 31st total of 8,189,438 shares. Currently, 7.9% of the company's shares are short sold. Based on an average daily trading volume, of 3,300,786 shares, the days-to-cover ratio is currently 3.2 days.

Analyst Upgrades and Downgrades

A number of equities analysts recently issued reports on ZS shares. Needham & Company LLC cut their target price on Zscaler from $310.00 to $180.00 and set a "buy" rating on the stock in a report on Friday, February 27th. Mizuho cut their target price on Zscaler from $265.00 to $250.00 and set an "outperform" rating on the stock in a report on Friday, February 27th. Royal Bank Of Canada cut their target price on Zscaler from $250.00 to $205.00 and set an "outperform" rating on the stock in a report on Friday, February 27th. Sanford C. Bernstein upgraded Zscaler from a "market perform" rating to an "outperform" rating and set a $228.00 target price on the stock in a report on Friday, February 13th. Finally, Morgan Stanley cut Zscaler from an "overweight" rating to an "equal weight" rating and cut their target price for the stock from $200.00 to $155.00 in a report on Wednesday, April 22nd. Two equities research analysts have rated the stock with a Strong Buy rating, twenty-nine have assigned a Buy rating, nine have given a Hold rating and one has assigned a Sell rating to the company. According to data from MarketBeat, the stock presently has an average rating of "Moderate Buy" and a consensus price target of $265.74.

Insider Activity at Zscaler

In related news, insider Robert Schlossman sold 2,263 shares of the stock in a transaction on Tuesday, March 17th. The stock was sold at an average price of $156.59, for a total value of $354,363.17. Following the transaction, the insider directly owned 72,390 shares in the company, valued at $11,335,550.10. This trade represents a 3.03% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. Also, Director James A. Beer sold 177 shares of the stock in a transaction on Wednesday, March 18th. The stock was sold at an average price of $153.53, for a total value of $27,174.81. Following the completion of the transaction, the director owned 4,384 shares in the company, valued at approximately $673,075.52. This represents a 3.88% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Over the last quarter, insiders have sold 12,130 shares of company stock worth $1,892,487. Corporate insiders own 17.20% of the company's stock.

Institutional Investors Weigh In On Zscaler

Several large investors have recently added to or reduced their stakes in ZS. Binnacle Investments Inc purchased a new stake in Zscaler in the 3rd quarter worth about $25,000. Tradewinds Capital Management LLC increased its holdings in Zscaler by 145.7% in the 3rd quarter. Tradewinds Capital Management LLC now owns 86 shares of the company's stock worth $26,000 after acquiring an additional 51 shares during the last quarter. Root Financial Partners LLC purchased a new stake in Zscaler in the 3rd quarter worth about $26,000. McIlrath & Eck LLC purchased a new stake in Zscaler in the 3rd quarter worth about $29,000. Finally, AlphaCentric Advisors LLC purchased a new stake in Zscaler in the 4th quarter worth about $29,000. Hedge funds and other institutional investors own 46.45% of the company's stock.

Zscaler Trading Up 1.5%

Shares of Zscaler stock opened at $136.07 on Wednesday. Zscaler has a 1 year low of $114.63 and a 1 year high of $336.99. The firm has a market cap of $21.88 billion, a PE ratio of -323.98 and a beta of 1.12. The stock has a fifty day moving average price of $145.15 and a 200-day moving average price of $212.67. The company has a debt-to-equity ratio of 0.78, a current ratio of 1.90 and a quick ratio of 1.90.

Zscaler (NASDAQ:ZS - Get Free Report) last announced its earnings results on Thursday, February 26th. The company reported $1.01 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.89 by $0.12. Zscaler had a positive return on equity of 0.06% and a negative net margin of 2.25%.The firm had revenue of $815.75 million during the quarter, compared to analyst estimates of $798.92 million. During the same period last year, the firm posted $0.78 EPS. The business's revenue was up 25.9% compared to the same quarter last year. Zscaler has set its Q3 2026 guidance at 1.000-1.010 EPS and its FY 2026 guidance at 3.990-4.020 EPS. Equities research analysts anticipate that Zscaler will post -0.03 EPS for the current 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.

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