Zscaler (NASDAQ:ZS) Shares Up 6.8% - What's Next?

Key Points

• Zscaler shares rose 6.8% in mid-day trading, reaching as high as $132.54 after closing at $123.80 the prior session. Trading volume was roughly in line with normal levels.
• Positive business catalysts included a multi-year partnership with the Aston Martin Aramco Formula One Team and management’s view that AI is expanding cybersecurity demand, which supports Zscaler’s long-term growth narrative.
• Analysts remain broadly bullish: several firms reiterated Buy ratings, and the stock carries a consensus “Moderate Buy” with an average target price of $213.97. However, investor caution remains due to insider selling and a legal investigation announcement.

Zscaler, Inc. (NASDAQ:ZS - Get Free Report) shares were up 6.8% during mid-day trading on Friday . The stock traded as high as $132.54 and last traded at $132.26. Approximately 3,662,766 shares changed hands during trading, a decline of 1% from the average daily volume of 3,684,102 shares. The stock had previously closed at $123.80.

Key Stories Impacting Zscaler

Here are the key news stories impacting Zscaler this week:

• Positive Sentiment: Zscaler announced a multi-year partnership with the Aston Martin Aramco Formula One Team, which will use Zscaler’s Zero Trust Exchange platform to secure sensitive design, strategy and telemetry data. The deal highlights Zscaler’s relevance in mission-critical cybersecurity and may boost confidence in its enterprise pipeline. Article: Racing Innovation Meets Zero Trust: Aston Martin Aramco Formula One™ Team and Zscaler Redefine Speed and Security
• Positive Sentiment: CEO comments across several interviews emphasized that AI is creating a major new opportunity for cybersecurity and could improve bug detection, reinforcing the long-term growth narrative for Zscaler as AI drives more demand for cloud security. Article: AI creates biggest cybersecurity opportunity in years: Zscaler CEO
• Neutral Sentiment: Recent coverage noted that Zscaler has risen modestly since its last earnings report, reflecting ongoing investor interest after results and guidance that already showed solid revenue growth. Article: Why Is Zscaler (ZS) Up 0.7% Since Last Earnings Report?
• Neutral Sentiment: One headline reported a large increase in short interest, but the figures shown were zero shares and zero days to cover, suggesting the report is likely not materially informative for investors.
• Negative Sentiment: Pomerantz LLP said it is investigating claims on behalf of Zscaler investors, which can create overhang and add caution around the stock even if no wrongdoing has been established. Article: INVESTOR ALERT: Pomerantz Law Firm Investigates Claim On Behalf of Investors of Zscaler, Inc. - ZS
• Negative Sentiment: A separate report noted insider selling by Adam Geller, which may weigh on sentiment if investors view it as a lack of near-term upside confidence. Article: Adam Geller Sells 2,817 Shares of Zscaler NASDAQ: ZS Stock

Wall Street Analyst Weigh In

A number of research analysts recently issued reports on the company. Rosenblatt Securities reiterated a "buy" rating and issued a $200.00 target price on shares of Zscaler in a report on Wednesday, June 10th. B. Riley Financial reduced their price target on Zscaler from $225.00 to $215.00 and set a "buy" rating on the stock in a research report on Wednesday, May 27th. Needham & Company LLC reiterated a "buy" rating and issued a $180.00 price objective on shares of Zscaler in a research note on Wednesday, June 10th. Canaccord Genuity Group restated a "buy" rating and set a $210.00 target price on shares of Zscaler in a research note on Thursday, June 11th. Finally, Stifel Nicolaus reduced their target price on shares of Zscaler from $180.00 to $175.00 and set a "buy" rating on the stock in a report on Wednesday, May 27th. Thirty-four analysts have rated the stock with a Buy rating, six have assigned a Hold rating and one has issued a Sell rating to the company. According to MarketBeat.com, the stock has a consensus rating of "Moderate Buy" and an average target price of $213.97.

Zscaler Stock Performance

The company has a market cap of $21.39 billion, a price-to-earnings ratio of -275.54, a price-to-earnings-growth ratio of 79.57 and a beta of 0.97. The firm has a 50-day simple moving average of $141.56 and a 200 day simple moving average of $169.19. The company has a quick ratio of 1.86, a current ratio of 1.86 and a debt-to-equity ratio of 0.72.

Zscaler (NASDAQ:ZS - Get Free Report) last posted its quarterly earnings data on Tuesday, May 26th. The company reported $1.08 earnings per share for the quarter, beating analysts' consensus estimates of $1.01 by $0.07. Zscaler had a negative net margin of 2.44% and a negative return on equity of 0.37%. The firm had revenue of $850.48 million for the quarter, compared to analyst estimates of $835.14 million. During the same period last year, the firm posted $0.84 EPS. Zscaler's quarterly revenue was up 25.4% on a year-over-year basis. Zscaler has set its Q4 2026 guidance at 1.080-1.090 EPS and its FY 2026 guidance at 4.100-4.110 EPS. On average, sell-side analysts predict that Zscaler, Inc. will post 0.11 earnings per share for the current fiscal year.

Insider Buying and Selling

In related news, CFO Kevin Rubin sold 3,000 shares of the company's stock in a transaction on Thursday, June 25th. The stock was sold at an average price of $124.22, for a total value of $372,660.00. Following the completion of the transaction, the chief financial officer directly owned 41,901 shares in the company, valued at approximately $5,204,942.22. This represents a 6.68% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Robert Schlossman sold 3,146 shares of the company's stock in a transaction dated Tuesday, June 16th. The shares were sold at an average price of $126.43, for a total transaction of $397,748.78. Following the transaction, the insider directly owned 69,366 shares of the company's stock, valued at approximately $8,769,943.38. This represents a 4.34% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The sale was made to cover tax withholding obligations related to the vesting of equity awards. In the last 90 days, insiders have sold 15,644 shares of company stock worth $1,960,287. 17.20% of the stock is owned by company insiders.

Institutional Trading of Zscaler

A number of institutional investors have recently modified their holdings of ZS. Pacer Advisors Inc. raised its position in Zscaler by 1.7% in the first quarter. Pacer Advisors Inc. now owns 91,583 shares of the company's stock valued at $12,848,000 after purchasing an additional 1,569 shares during the period. Caerus Investment Advisors LLC lifted its holdings in Zscaler by 37.8% in the 1st quarter. Caerus Investment Advisors LLC now owns 1,444 shares of the company's stock worth $203,000 after buying an additional 396 shares in the last quarter. Front Row Advisors LLC increased its position in shares of Zscaler by 24.1% during the first quarter. Front Row Advisors LLC now owns 809 shares of the company's stock worth $113,000 after acquiring an additional 157 shares during the last quarter. Western Wealth Management LLC purchased a new position in Zscaler in the first quarter valued at about $33,000. Finally, Bank of America Corp DE grew its stake in Zscaler by 44.3% during the 1st quarter. Bank of America Corp DE now owns 779,245 shares of the company's stock valued at $109,320,000 after purchasing an additional 239,326 shares in the last quarter. Hedge funds and other institutional investors own 46.45% of the company's stock.

Zscaler Company Profile

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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