Zscaler (NASDAQ:ZS) Trading Up 1.1% - Time to Buy?

Key Points

• Zscaler shares rose 1.1% during Thursday trading, with volume running slightly above average as investors reacted to a mix of bullish analyst commentary and company news.
• Several analysts reaffirmed positive ratings and set price targets well above the current share price, with targets ranging from $175 to $225 and a MarketBeat consensus target of $214.33.
• The company highlighted new AI-era security products and strong cloud/AI demand, but sentiment remains tempered by securities-law investigations and concerns that recent guidance points to slower growth.

Shares of Zscaler, Inc. (NASDAQ:ZS - Get Free Report) were up 1.1% during mid-day trading on Thursday . The company traded as high as $126.35 and last traded at $126.11. Approximately 3,778,057 shares changed hands during mid-day trading, an increase of 5% from the average daily volume of 3,602,568 shares. The stock had previously closed at $124.73.

Key Stories Impacting Zscaler

Here are the key news stories impacting Zscaler this week:

• Positive Sentiment: Several analysts reiterated bullish views on Zscaler, including Canaccord Genuity, Wedbush, Royal Bank of Canada, Guggenheim, Rosenblatt, and Needham, with price targets ranging from $180 to $220, suggesting substantial upside from current levels. Analyst rating updates via Benzinga
• Positive Sentiment: Zscaler’s Zenith Live announcements highlighted new AI-era security products, including the ZAgent Framework and expanded Zero Trust SASE capabilities, which could support future demand and product adoption. Zscaler Redefines Zero Trust SASE for the AI Era
• Positive Sentiment: Management and industry coverage emphasized strong AI and cloud security demand, and Zscaler research showed rising cybercrime sophistication, reinforcing the need for its platform. Zscaler Still Seeing Solid Demand for Cloud, AI Products, Wedbush Says
• Neutral Sentiment: Zscaler also unveiled research showing AI is changing phishing tactics, which supports the company’s security narrative but is not an immediate financial catalyst. Zscaler Research Finds Cybercrime Economics Are Shifting as AI Trades Mass Volume for Lethal Precision
• Negative Sentiment: Multiple law firms announced or expanded securities-law investigations into Zscaler, creating headline risk and likely weighing on sentiment. ZS Investors Have Opportunity to Join Zscaler, Inc. Fraud Investigation with the Schall Law Firm
• Negative Sentiment: Recent commentary highlighted that Zscaler is trading near its 52-week low, with FY27 guidance signaling slower growth, which has fueled concerns about valuation and near-term momentum. Zscaler Trades Near 52-Week Low: Time to Hold the Stock or Exit?

Wall Street Analyst Weigh In

Several research firms have recently issued reports on ZS. FBN Securities reaffirmed an "outperform" rating and set a $175.00 price objective on shares of Zscaler in a research report on Wednesday, May 27th. Stifel Nicolaus decreased their target price on shares of Zscaler from $180.00 to $175.00 and set a "buy" rating for the company in a research note on Wednesday, May 27th. Truist Financial set a $210.00 price target on shares of Zscaler in a research note on Wednesday, May 27th. Cantor Fitzgerald reissued an "overweight" rating and issued a $225.00 price target on shares of Zscaler in a report on Wednesday. Finally, Oppenheimer reduced their price objective on shares of Zscaler from $280.00 to $250.00 and set an "outperform" rating for the company in a research note on Tuesday, March 10th. Thirty-four investment analysts have rated the stock with a Buy rating, six have issued a Hold rating and one has assigned a Sell rating to the company's stock. According to data from MarketBeat, Zscaler currently has an average rating of "Moderate Buy" and a consensus price target of $214.33.

Zscaler Price Performance

The company's 50 day simple moving average is $142.97 and its 200-day simple moving average is $179.23. The company has a current ratio of 1.86, a quick ratio of 1.86 and a debt-to-equity ratio of 0.72. The company has a market capitalization of $20.39 billion, a price-to-earnings ratio of -262.72, a PEG ratio of 78.68 and a beta of 0.97.

Zscaler (NASDAQ:ZS - Get Free Report) last issued its quarterly earnings results on Tuesday, May 26th. The company reported $1.08 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $1.01 by $0.07. Zscaler had a negative return on equity of 0.37% and a negative net margin of 2.44%.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 company earned $0.84 EPS. The firm'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, equities research analysts predict that Zscaler, Inc. will post 0.11 earnings per share for the current fiscal year.

Insider Buying and Selling

In other news, CEO Jagtar Singh Chaudhry sold 1,941 shares of the firm's stock in a transaction dated Tuesday, March 17th. The stock was sold at an average price of $156.59, for a total value of $303,941.19. Following the transaction, the chief executive officer directly owned 345,916 shares in the company, valued at $54,166,986.44. This trade represents a 0.56% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available through this hyperlink. Also, CFO Kevin Rubin sold 1,682 shares of the firm's stock in a transaction dated Tuesday, March 17th. The stock was sold at an average price of $156.59, for a total value of $263,384.38. Following the completion of the transaction, the chief financial officer owned 46,479 shares in the company, valued at approximately $7,278,146.61. This trade represents a 3.49% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Over the last quarter, insiders sold 12,130 shares of company stock worth $1,892,487. Corporate insiders own 17.20% of the company's stock.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently modified their holdings of the stock. Binnacle Investments Inc acquired a new position in shares of Zscaler during the third quarter worth about $25,000. Picton Mahoney Asset Management bought a new stake in Zscaler in the third quarter valued at about $30,000. AlphaCentric Advisors LLC bought a new stake in Zscaler in the fourth quarter valued at about $29,000. University of Texas Texas AM Investment Management Co. bought a new position in Zscaler in the fourth quarter worth about $30,000. Finally, Mcguire Capital Advisors Inc. bought a new position in Zscaler in the fourth quarter worth about $32,000. Institutional investors and hedge funds 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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