Zscaler (NASDAQ:ZS) Announces Quarterly Earnings Results

Key Points

• Zscaler reported a quarterly earnings per share (EPS) of ($0.04), significantly missing analysts' expectations of $0.80 by ($0.84).
• The company's stock fell by 0.9% to $274.57, amid its ongoing negative net margin of 1.52% and negative return on equity of 0.59%.
• Despite the poor earnings results, analysts have varying opinions, with a consensus rating of "Moderate Buy" and a target price averaging $297.63.

Zscaler (NASDAQ:ZS - Get Free Report) issued its quarterly earnings data on Tuesday. The company reported $0.89 EPS for the quarter, topping analysts' consensus estimates of $0.80 by $0.09, Briefing.com reports. Zscaler had a negative net margin of 1.55% and a negative return on equity of 0.49%. The firm had revenue of $719.23 million for the quarter, compared to analyst estimates of $707.15 million. The company's revenue was up 21.3% on a year-over-year basis. During the same quarter in the prior year, the firm earned $0.88 EPS. Zscaler updated its FY 2026 guidance to 3.640-3.680 EPS and its Q1 2026 guidance to 0.850-0.860 EPS.

Zscaler Stock Up 2.2%

Shares of NASDAQ ZS traded up $5.95 during mid-day trading on Friday, reaching $274.20. 1,620,011 shares of the company were exchanged, compared to its average volume of 1,603,908. Zscaler has a twelve month low of $153.45 and a twelve month high of $318.46. The stock has a market capitalization of $42.69 billion, a P/E ratio of -1,015.56, a P/E/G ratio of 226.46 and a beta of 1.05. The company's 50-day simple moving average is $285.29 and its 200-day simple moving average is $251.14.

Insider Activity

In related news, EVP Raj Judge sold 2,957 shares of the business's stock in a transaction on Tuesday, June 17th. The stock was sold at an average price of $303.70, for a total value of $898,040.90. Following the completion of the sale, the executive vice president directly owned 76,289 shares in the company, valued at $23,168,969.30. The trade was a 3.73% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available through the SEC website. Also, CEO Jagtar Singh Chaudhry sold 2,849 shares of Zscaler stock in a transaction on Tuesday, June 17th. The stock was sold at an average price of $303.70, for a total value of $865,241.30. Following the sale, the chief executive officer directly owned 353,565 shares of the company's stock, valued at $107,377,690.50. This represents a 0.80% decrease in their position. The disclosure for this sale can be found here. Over the last three months, insiders sold 143,305 shares of company stock valued at $43,199,936. Company insiders own 18.10% of the company's stock.

Institutional Inflows and Outflows

Hedge funds have recently modified their holdings of the stock. State of Wyoming acquired a new position in Zscaler in the second quarter valued at about $129,000. Smartleaf Asset Management LLC increased its holdings in Zscaler by 7.5% in the 2nd quarter. Smartleaf Asset Management LLC now owns 648 shares of the company's stock valued at $204,000 after buying an additional 45 shares during the period. IHT Wealth Management LLC acquired a new position in shares of Zscaler in the 2nd quarter valued at approximately $223,000. Thrivent Financial for Lutherans bought a new stake in shares of Zscaler during the 2nd quarter worth approximately $232,000. Finally, Rakuten Securities Inc. lifted its holdings in shares of Zscaler by 36.2% during the 2nd quarter. Rakuten Securities Inc. now owns 794 shares of the company's stock worth $249,000 after acquiring an additional 211 shares during the period. Institutional investors own 46.45% of the company's stock.

Analyst Upgrades and Downgrades

ZS has been the topic of several recent research reports. JPMorgan Chase & Co. raised their price target on Zscaler from $348.00 to $351.00 and gave the stock an "overweight" rating in a research report on Wednesday. Needham & Company LLC restated a "buy" rating and set a $350.00 target price on shares of Zscaler in a report on Wednesday. Royal Bank Of Canada boosted their target price on Zscaler from $315.00 to $335.00 and gave the stock an "outperform" rating in a research report on Wednesday. BMO Capital Markets increased their price target on shares of Zscaler from $295.00 to $315.00 and gave the company an "outperform" rating in a research report on Wednesday. Finally, Zacks Research cut shares of Zscaler from a "hold" rating to a "strong sell" rating in a report on Wednesday. One equities research analyst has rated the stock with a Strong Buy rating, twenty-nine have issued a Buy rating, seven have issued a Hold rating and one has given a Sell rating to the company's stock. According to MarketBeat.com, the stock has a consensus rating of "Moderate Buy" and an average target price of $307.00.

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.