Wall Street Zen Downgrades Zscaler (NASDAQ:ZS) to Hold

Key Points

• Zscaler has been downgraded from a "buy" rating to a "hold" rating by Wall Street Zen, signaling a potential shift in investor sentiment towards the stock.
• Analysts from multiple firms have mixed views on Zscaler, with JPMorgan Chase upgrading its price target to $351 while other firms like UBS and Morgan Stanley have also provided positive ratings.
• The company's recent quarterly earnings showed a 21.3% year-over-year revenue growth and reported earnings per share (EPS) of $0.89, exceeding consensus estimates.

Zscaler (NASDAQ:ZS - Get Free Report) was downgraded by stock analysts at Wall Street Zen from a "buy" rating to a "hold" rating in a research note issued on Saturday.

Other equities research analysts also recently issued reports about the stock. JMP Securities reiterated a "market outperform" rating and set a $355.00 price objective on shares of Zscaler in a research note on Wednesday, September 3rd. JPMorgan Chase & Co. increased their price objective on shares of Zscaler from $348.00 to $351.00 and gave the company an "overweight" rating in a research note on Wednesday, September 3rd. UBS Group dropped their target price on shares of Zscaler from $365.00 to $350.00 and set a "buy" rating on the stock in a report on Wednesday, September 3rd. Morgan Stanley raised shares of Zscaler from an "equal weight" rating to an "overweight" rating and increased their target price for the stock from $280.00 to $320.00 in a report on Tuesday, September 2nd. Finally, Susquehanna increased their price objective on shares of Zscaler from $320.00 to $340.00 and gave the stock a "positive" rating in a report on Wednesday, September 3rd. One investment analyst has rated the stock with a Strong Buy rating, twenty-nine have assigned a Buy rating, eight have assigned a Hold rating and one has assigned a Sell rating to the company. According to data from MarketBeat.com, the stock currently has an average rating of "Moderate Buy" and an average price target of $307.43.

Zscaler Stock Performance

Shares of ZS stock opened at $300.25 on Friday. The company has a debt-to-equity ratio of 0.95, a quick ratio of 2.01 and a current ratio of 2.01. Zscaler has a one year low of $164.78 and a one year high of $319.89. The company has a 50 day moving average price of $286.62 and a 200 day moving average price of $270.37. The firm has a market capitalization of $47.53 billion, a price-to-earnings ratio of -1,112.04 and a beta of 1.06.

Zscaler (NASDAQ:ZS - Get Free Report) last released its quarterly earnings data on Tuesday, September 2nd. The company reported $0.89 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.80 by $0.09. Zscaler had a negative net margin of 1.55% and a negative return on equity of 0.47%. The company had revenue of $719.23 million during the quarter, compared to the consensus estimate of $707.15 million. During the same period in the previous year, the firm earned $0.88 earnings per share. Zscaler's revenue for the quarter 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. Sell-side analysts anticipate that Zscaler will post -0.1 EPS for the current year.

Insider Activity

In other Zscaler news, EVP Raj Judge sold 4,524 shares of the firm's stock in a transaction dated Tuesday, September 16th. The shares were sold at an average price of $280.70, for a total value of $1,269,886.80. Following the completion of the transaction, the executive vice president directly owned 73,832 shares in the company, valued at $20,724,642.40. This trade represents a 5.77% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which is available through this link. Also, insider Adam Geller sold 11,193 shares of the firm's stock in a transaction dated Tuesday, September 16th. The stock was sold at an average price of $280.70, for a total transaction of $3,141,875.10. Following the completion of the transaction, the insider owned 53,942 shares of the company's stock, valued at approximately $15,141,519.40. The trade was a 17.18% decrease in their ownership of the stock. The disclosure for this sale can be found here. In the last three months, insiders have sold 39,884 shares of company stock valued at $11,406,825. Corporate insiders own 18.10% of the company's stock.

Institutional Trading of Zscaler

Several institutional investors have recently made changes to their positions in the stock. Ethic Inc. boosted its holdings in shares of Zscaler by 14.9% during the third quarter. Ethic Inc. now owns 9,188 shares of the company's stock worth $2,753,000 after purchasing an additional 1,190 shares during the period. Perigon Wealth Management LLC acquired a new stake in Zscaler in the third quarter valued at approximately $540,000. Parisi Gray Wealth Management lifted its stake in Zscaler by 5.0% in the third quarter. Parisi Gray Wealth Management now owns 2,679 shares of the company's stock valued at $803,000 after acquiring an additional 127 shares during the last quarter. Sowell Financial Services LLC bought a new position in shares of Zscaler in the third quarter valued at approximately $202,000. Finally, Apollon Wealth Management LLC raised its position in shares of Zscaler by 4.1% in the third quarter. Apollon Wealth Management LLC now owns 3,206 shares of the company's stock valued at $961,000 after purchasing an additional 125 shares during the period. 46.45% of the stock is currently owned by institutional investors and hedge funds.

Zscaler Company Profile

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.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest and most accurate reporting. This story was reviewed by MarketBeat's editorial team prior to publication. Please send any questions or comments about this story to contact@marketbeat.com.