Zscaler (NASDAQ:ZS) Trading Up 1.7% - Should You Buy?

Key Points

• Zscaler shares rose 1.7% in Tuesday trading, with the stock touching an intraday high of $129.42 before closing near $126.17. Trading volume was below average, indicating lighter-than-usual activity.
• Analysts remain broadly positive despite recent target cuts: multiple firms lowered price objectives, but the stock still carries a consensus Moderate Buy rating and an average target price of $214.33.
• Fundamentals and growth news were encouraging, as Zscaler beat quarterly EPS and revenue estimates and posted 25.4% year-over-year revenue growth. Coverage also highlighted momentum in its Z-Flex offering and a major healthcare win, while insider sales were described as routine and tied to tax or 10b5-1 plans.

Zscaler, Inc. (NASDAQ:ZS - Get Free Report) was up 1.7% during mid-day trading on Tuesday . The stock traded as high as $129.42 and last traded at $126.17. Approximately 2,335,476 shares traded hands during trading, a decline of 37% from the average daily volume of 3,702,261 shares. The stock had previously closed at $124.06.

Zscaler News Roundup

Here are the key news stories impacting Zscaler this week:

• Positive Sentiment: Analysts highlighted momentum in Zscaler’s Z-Flex offering, saying it is helping drive higher customer spending, stronger platform adoption, and better revenue visibility as total contract value, annual recurring revenue, and remaining performance obligations continue to accelerate.
• Positive Sentiment: Another Zscaler-focused article noted that the company has been drawing strong investor interest as a trending stock, reflecting ongoing attention around its growth outlook and positioning in cybersecurity.
• Positive Sentiment: Coverage also pointed to a major healthcare win and recent index-related profile lift, which could help support Zscaler’s sales pipeline and brand visibility.
• Positive Sentiment: Comparative commentary versus CrowdStrike said Zscaler may have an edge due to expanding platform adoption and a lower valuation, which could appeal to investors looking for growth at a more reasonable price.
• Neutral Sentiment: Insider Adam Geller sold 2,817 shares at an average price of $122.60 under a pre-arranged Rule 10b5-1 plan. While insider sales can sometimes weigh on sentiment, the sale appears routine and does not necessarily signal a negative outlook.

Analyst Ratings Changes

Several research firms recently commented on ZS. UBS Group dropped their price target on Zscaler from $260.00 to $225.00 and set a "buy" rating for the company in a research report on Wednesday, May 27th. Mizuho decreased their price objective on Zscaler from $210.00 to $185.00 and set an "outperform" rating on the stock in a research report on Wednesday, May 27th. Robert W. Baird lowered their price objective on Zscaler from $265.00 to $230.00 and set an "outperform" rating for the company in a research note on Wednesday, May 27th. Piper Sandler dropped their target price on Zscaler from $185.00 to $160.00 and set a "neutral" rating for the company in a report on Wednesday, May 27th. Finally, Sanford C. Bernstein cut their target price on Zscaler from $228.00 to $224.00 and set an "outperform" rating on the stock in a research report on Wednesday, May 27th. Thirty-four investment analysts have rated the stock with a Buy rating, six have assigned a Hold rating and one has assigned a Sell rating to the company's stock. According to MarketBeat.com, the company currently has a consensus rating of "Moderate Buy" and an average target price of $214.33.

Zscaler Price Performance

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 $20.40 billion, a PE ratio of -262.85, a price-to-earnings-growth ratio of 78.06 and a beta of 0.97. The stock's 50-day moving average is $141.29 and its two-hundred day moving average is $171.66.

Zscaler (NASDAQ:ZS - Get Free Report) last announced its earnings results on Tuesday, May 26th. The company reported $1.08 earnings per share (EPS) for the quarter, beating the consensus estimate 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 business had revenue of $850.48 million during the quarter, compared to analyst estimates of $835.14 million. During the same quarter in the previous year, the business earned $0.84 earnings per share. The company's revenue for the quarter was up 25.4% compared to the same quarter last year. 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 analysts predict that Zscaler, Inc. will post 0.11 EPS for the current year.

Insiders Place Their Bets

In other Zscaler news, CFO Kevin Rubin sold 1,686 shares of the stock in a transaction on Tuesday, June 16th. The stock was sold at an average price of $126.43, for a total value of $213,160.98. Following the sale, the chief financial officer owned 44,901 shares in the company, valued at $5,676,833.43. This trade represents a 3.62% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is available at this hyperlink. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, insider Adam Geller sold 2,817 shares of Zscaler stock in a transaction on Monday, June 22nd. The stock was sold at an average price of $122.60, for a total value of $345,364.20. Following the sale, the insider owned 42,314 shares of the company's stock, valued at approximately $5,187,696.40. This trade represents a 6.24% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last quarter, insiders sold 12,644 shares of company stock worth $1,587,627. Insiders own 17.20% of the company's stock.

Institutional Investors Weigh In On Zscaler

Several large investors have recently added to or reduced their stakes in the stock. Pacer Advisors Inc. grew its stake in Zscaler by 1.7% in the 1st quarter. Pacer Advisors Inc. now owns 91,583 shares of the company's stock worth $12,848,000 after acquiring an additional 1,569 shares in the last quarter. Caerus Investment Advisors LLC raised its stake in shares of Zscaler by 37.8% during the first quarter. Caerus Investment Advisors LLC now owns 1,444 shares of the company's stock valued at $203,000 after acquiring an additional 396 shares in the last quarter. Front Row Advisors LLC raised its stake in shares of Zscaler by 24.1% during the first quarter. Front Row Advisors LLC now owns 809 shares of the company's stock valued at $113,000 after acquiring an additional 157 shares in the last quarter. Western Wealth Management LLC purchased a new stake in shares of Zscaler in the first quarter valued at approximately $33,000. Finally, Bank of America Corp DE boosted its holdings in shares of Zscaler by 44.3% in the first 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 during the period. 46.45% of the stock is owned by hedge funds and other institutional investors.

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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