Zscaler (NASDAQ:ZS) Raised to "Overweight" at Morgan Stanley

Key Points

• Morgan Stanley upgraded Zscaler's rating from "equal weight" to "overweight" and set a new target price of $320.00, indicating a potential upside of 15.50% from its current price.
• Multiple analysts have positive ratings on Zscaler, with a consensus target price of $297.63; the stock currently has one Strong Buy, twenty-nine Buy, and seven Hold ratings.
• Insiders at Zscaler have sold a significant amount of shares recently, with total insider sales valued at $50.6 million over the last ninety days.

Zscaler (NASDAQ:ZS - Get Free Report) was upgraded by Morgan Stanley from an "equal weight" rating to an "overweight" rating in a research note issued on Tuesday, Marketbeat Ratings reports. The brokerage currently has a $320.00 target price on the stock, up from their previous target price of $280.00. Morgan Stanley's price target suggests a potential upside of 16.70% from the company's current price.

Other research analysts have also recently issued research reports about the company. FBN Securities upgraded Zscaler to a "strong-buy" rating in a research note on Friday, May 30th. Needham & Company LLC boosted their price target on Zscaler from $240.00 to $310.00 and gave the stock a "buy" rating in a research note on Friday, May 30th. Bank of America boosted their price target on Zscaler from $285.00 to $340.00 and gave the stock a "buy" rating in a research note on Monday, June 9th. KeyCorp boosted their price target on Zscaler from $290.00 to $310.00 and gave the stock an "overweight" rating in a research note on Friday, May 30th. Finally, UBS Group boosted their price target on Zscaler from $315.00 to $365.00 and gave the stock a "buy" rating in a research note on Friday, June 27th. One investment analyst has rated the stock with a Strong Buy rating, twenty-nine have assigned a Buy rating, seven have given a Hold rating and one has given a Sell rating to the company's stock. According to data from MarketBeat, the company currently has a consensus rating of "Moderate Buy" and an average target price of $307.00.

Zscaler Trading Up 2.2%

Shares of ZS traded up $5.95 during midday trading on Tuesday, reaching $274.20. 1,620,011 shares of the company were exchanged, compared to its average volume of 1,603,908. The stock has a 50-day moving average price of $285.29 and a 200-day moving average price of $250.88. The company has a market cap of $42.69 billion, a price-to-earnings ratio of -1,015.56, a P/E/G ratio of 221.54 and a beta of 1.05. Zscaler has a 1-year low of $153.45 and a 1-year high of $318.46.

Zscaler (NASDAQ:ZS - Get Free Report) last issued its quarterly earnings data on Tuesday, September 2nd. The company reported $0.89 EPS for the quarter, topping analysts' consensus estimates of $0.80 by $0.09. The company had revenue of $719.23 million for the quarter, compared to analysts' expectations of $707.15 million. Zscaler had a negative return on equity of 0.49% and a negative net margin of 1.55%.The firm's quarterly revenue was up 21.3% on a year-over-year basis. During the same quarter in the previous year, the firm posted $0.88 earnings per share. Zscaler has set its FY 2026 guidance at 3.640-3.680 EPS. Q1 2026 guidance at 0.850-0.860 EPS. Equities research analysts anticipate that Zscaler will post -0.1 earnings per share for the current year.

Insider Buying and Selling

In other news, EVP Raj Judge sold 2,957 shares of the 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 owned 76,289 shares in the company, valued at $23,168,969.30. This represents a 3.73% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. Also, insider Syam Nair sold 4,064 shares of the company's stock in a transaction on Tuesday, June 17th. The stock was sold at an average price of $303.70, for a total transaction of $1,234,236.80. Following the completion of the transaction, the insider directly owned 106,659 shares in the company, valued at $32,392,338.30. This trade represents a 3.67% decrease in their ownership of the stock. The disclosure for this sale can be found here. Over the last three months, insiders have sold 143,305 shares of company stock valued at $43,199,936. 18.10% of the stock is currently owned by company insiders.

Hedge Funds Weigh In On Zscaler

Hedge funds have recently modified their holdings of the stock. China Universal Asset Management Co. Ltd. increased its position in Zscaler by 46.0% during the second quarter. China Universal Asset Management Co. Ltd. now owns 5,535 shares of the company's stock worth $1,738,000 after buying an additional 1,745 shares during the last quarter. Orion Porfolio Solutions LLC increased its position in Zscaler by 41.9% during the second quarter. Orion Porfolio Solutions LLC now owns 4,374 shares of the company's stock worth $1,373,000 after buying an additional 1,292 shares during the last quarter. Munro Partners acquired a new position in Zscaler during the second quarter worth $3,221,000. Thrivent Financial for Lutherans acquired a new position in Zscaler during the second quarter worth $232,000. Finally, MASTERINVEST Kapitalanlage GmbH acquired a new position in Zscaler during the second quarter worth $1,793,000. 46.45% of the stock is owned by institutional investors and hedge funds.

About Zscaler

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.