Zscaler (NASDAQ:ZS) Earns "Sell (D-)" Rating from Weiss Ratings

Key Points

• Zscaler's shares received a "Sell (D-)" rating from Weiss Ratings, indicating a negative outlook on the stock.
• Despite the downgraded rating, several analysts have set a range of price objectives for Zscaler, with a consensus average target of $307.86 and a majority rating it as a "Moderate Buy."
• In recent trading, Zscaler's stock reached $324.69 and has shown a 21.3% increase in quarterly revenue year-over-year, although it recorded a negative net margin.

Zscaler (NASDAQ:ZS - Get Free Report)'s stock had its "sell (d-)" rating reiterated by stock analysts at Weiss Ratings in a research note issued to investors on Friday,Weiss Ratings reports.

ZS has been the subject of several other research reports. Scotiabank dropped their price objective on shares of Zscaler from $360.00 to $334.00 and set a "sector outperform" rating for the company in a research report on Wednesday, September 3rd. UBS Group dropped their price objective on shares of Zscaler from $365.00 to $350.00 and set a "buy" rating for the company in a research report on Wednesday, September 3rd. Evercore ISI boosted their price objective on shares of Zscaler from $290.00 to $320.00 and gave the stock an "outperform" rating in a research report on Wednesday, September 3rd. Royal Bank Of Canada boosted their price objective on shares of Zscaler from $335.00 to $350.00 and gave the stock an "outperform" rating in a research report on Thursday, October 2nd. Finally, Morgan Stanley upgraded shares of Zscaler from an "equal weight" rating to an "overweight" rating and boosted their price objective for the stock from $280.00 to $320.00 in a research report on Tuesday, September 2nd. One equities research analyst has rated the stock with a Strong Buy rating, twenty-nine have given a Buy rating, eight have assigned a Hold rating and one has assigned a Sell rating to the company's stock. Based on data from MarketBeat, the stock presently has an average rating of "Moderate Buy" and an average price target of $307.86.

Zscaler Price Performance

Shares of NASDAQ:ZS traded up $5.92 during trading on Friday, reaching $324.69. The stock had a trading volume of 634,624 shares, compared to its average volume of 2,026,329. Zscaler has a 52 week low of $164.78 and a 52 week high of $327.39. The business's 50-day moving average price is $289.57 and its 200 day moving average price is $273.74. The company has a debt-to-equity ratio of 0.95, a current ratio of 2.01 and a quick ratio of 2.01. The stock has a market capitalization of $51.40 billion, a PE ratio of -1,202.56 and a beta of 1.06.

Zscaler (NASDAQ:ZS - Get Free Report) last posted its earnings results on Tuesday, September 2nd. The company reported $0.89 earnings per share (EPS) for the quarter, beating analysts' consensus estimates 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 analysts' expectations of $707.15 million. During the same quarter in the previous year, the company posted $0.88 earnings per share. Zscaler's quarterly revenue was up 21.3% compared to the same quarter last year. Zscaler has set its FY 2026 guidance at 3.640-3.680 EPS. Q1 2026 guidance at 0.850-0.860 EPS. As a group, equities analysts predict that Zscaler will post -0.1 earnings per share for the current year.

Insiders Place Their Bets

In related news, insider Robert Schlossman sold 7,006 shares of the firm's stock in a transaction on Thursday, October 2nd. The stock was sold at an average price of $305.57, for a total transaction of $2,140,823.42. Following the sale, the insider owned 76,132 shares of the company's stock, valued at approximately $23,263,655.24. This trade represents a 8.43% decrease in their position. The sale was disclosed in a filing with the SEC, which can be accessed through this link. Also, EVP Raj Judge sold 4,524 shares of the firm's stock in a transaction on Tuesday, September 16th. The stock was sold at an average price of $280.70, for a total value of $1,269,886.80. Following the sale, the executive vice president directly owned 73,832 shares in the company, valued at $20,724,642.40. The trade was a 5.77% decrease in their position. The disclosure for this sale can be found here. Over the last quarter, insiders sold 39,884 shares of company stock worth $11,406,825. 18.10% of the stock is owned by corporate insiders.

Institutional Investors Weigh In On Zscaler

Several hedge funds have recently bought and sold shares of the company. Vanguard Group Inc. lifted its stake in Zscaler by 8.3% in the 2nd quarter. Vanguard Group Inc. now owns 10,715,132 shares of the company's stock valued at $3,363,909,000 after purchasing an additional 824,626 shares during the last quarter. Goldman Sachs Group Inc. raised its holdings in Zscaler by 23.4% in the 1st quarter. Goldman Sachs Group Inc. now owns 3,048,238 shares of the company's stock valued at $604,831,000 after acquiring an additional 578,883 shares during the period. T. Rowe Price Investment Management Inc. bought a new position in Zscaler in the 1st quarter valued at about $516,622,000. Geode Capital Management LLC raised its holdings in Zscaler by 6.0% in the 2nd quarter. Geode Capital Management LLC now owns 1,866,329 shares of the company's stock valued at $584,160,000 after acquiring an additional 105,318 shares during the period. Finally, AQR Capital Management LLC raised its holdings in Zscaler by 0.7% in the 2nd quarter. AQR Capital Management LLC now owns 1,199,815 shares of the company's stock valued at $371,823,000 after acquiring an additional 7,885 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.

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