Zscaler (NASDAQ:ZS) Lowered to Equal Weight Rating by Morgan Stanley

Key Points

• Morgan Stanley downgraded Zscaler from "Overweight" to "Equal Weight" and set a $155 price target, implying roughly an 11% upside from the current share price.
• Zscaler beat the quarter with $1.01 EPS (vs. $0.89 expected) and $815.8M revenue—up 25.9% year-over-year—and issued FY2026 guidance of $3.99–4.02 EPS.
• MarketBeat shows a consensus of Moderate Buy with an average analyst price target of $264.22 (well above Morgan Stanley's target), while insiders sold about 12,130 shares (~$1.9M) last quarter.

Zscaler (NASDAQ:ZS - Get Free Report) was downgraded by Morgan Stanley from an "overweight" rating to an "equal weight" rating in a report released on Wednesday, Marketbeat Ratings reports. They presently have a $155.00 price target on the stock. Morgan Stanley's price target indicates a potential upside of 11.02% from the stock's current price.

Several other research firms have also recently weighed in on ZS. Zacks Research raised Zscaler from a "strong sell" rating to a "hold" rating in a research report on Friday, March 27th. Royal Bank Of Canada dropped 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. Weiss Ratings reiterated a "sell (d-)" rating on shares of Zscaler in a report on Wednesday, January 21st. Barclays set a $220.00 target price on Zscaler in a report on Thursday, February 19th. Finally, JPMorgan Chase & Co. dropped their target price on Zscaler from $354.00 to $267.00 and set an "overweight" rating on the stock in a report on Friday, February 20th. Two investment analysts have rated the stock with a Strong Buy rating, thirty have given a Buy rating, nine have assigned a Hold rating and one has given a Sell rating to the stock. Based on data from MarketBeat, the company has a consensus rating of "Moderate Buy" and an average price target of $264.22.

Zscaler Stock Up 3.6%

ZS stock opened at $139.61 on Wednesday. The company has a debt-to-equity ratio of 0.78, a current ratio of 1.90 and a quick ratio of 1.90. The stock has a market capitalization of $22.45 billion, a P/E ratio of -332.40 and a beta of 1.12. The business has a 50-day moving average of $148.92 and a 200-day moving average of $218.70. Zscaler has a fifty-two week low of $114.63 and a fifty-two week high of $336.99.

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

Insider Activity

In other Zscaler news, CEO Jagtar Singh Chaudhry sold 1,941 shares of the business's stock in a transaction that occurred on Tuesday, March 17th. The stock was sold at an average price of $156.59, for a total transaction of $303,941.19. Following the transaction, the chief executive officer owned 345,916 shares of the company's stock, valued at $54,166,986.44. The trade was a 0.56% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, insider Adam Geller sold 2,094 shares of the business's stock in a transaction that occurred on Wednesday, March 18th. The stock was sold at an average price of $153.53, for a total value of $321,491.82. Following the transaction, the insider directly owned 46,949 shares in the company, valued at approximately $7,208,079.97. This trade represents a 4.27% decrease in their position. The SEC filing for this sale provides additional information. Over the last quarter, insiders have sold 12,130 shares of company stock valued at $1,892,487. 17.20% of the stock is owned by insiders.

Institutional Investors Weigh In On Zscaler

Institutional investors have recently made changes to their positions in the company. Groupama Asset Managment raised its position in shares of Zscaler by 76,352.6% in the third quarter. Groupama Asset Managment now owns 4,750,000 shares of the company's stock valued at $1,423,385,000 after buying an additional 4,743,787 shares in the last quarter. Price T Rowe Associates Inc. MD raised 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 buying an additional 777,414 shares in the last quarter. AQR Capital Management LLC raised its position in shares of Zscaler by 61.8% in the third quarter. AQR Capital Management LLC now owns 1,941,571 shares of the company's stock valued at $576,083,000 after buying an additional 741,756 shares in the last quarter. Vanguard Group Inc. raised its position in shares of Zscaler by 6.1% in the third quarter. Vanguard Group Inc. now owns 11,367,903 shares of the company's stock valued at $3,406,506,000 after buying an additional 652,771 shares in the last quarter. Finally, Alyeska Investment Group L.P. acquired a new stake in shares of Zscaler in the third quarter valued at approximately $109,440,000. Institutional investors own 46.45% of the company's stock.

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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