Zscaler's (ZS) "Buy" Rating Reiterated at Needham & Company LLC

Key Points

• Needham & Company LLC reiterated its Buy rating on Zscaler and set a $180 price target, which implies modest downside from the prior close.
• Zscaler’s latest quarter beat expectations, with EPS of $1.08 and revenue of $850.5 million, both above analyst estimates, while revenue rose 25.4% year over year.
• Despite strong results, the stock faces mixed sentiment: multiple analysts have recently lowered price targets or turned more cautious, and investors are watching weaker near-term guidance and increasing competition in cybersecurity.

Zscaler (NASDAQ:ZS - Get Free Report)'s stock had its "buy" rating reaffirmed by analysts at Needham & Company LLC in a research note issued to investors on Wednesday,Benzinga reports. They currently have a $180.00 price target on the stock. Needham & Company LLC's price objective would suggest a potential downside of 2.49% from the company's previous close.

A number of other equities analysts have also recently issued reports on the stock. BTIG Research restated a "neutral" rating on shares of Zscaler in a research report on Thursday, April 9th. Berenberg Bank decreased their price objective on shares of Zscaler from $390.00 to $320.00 and set a "buy" rating on the stock in a research report on Friday, February 27th. Evercore cut shares of Zscaler from an "outperform" rating to a "cautious" rating in a research report on Wednesday. Robert W. Baird decreased their price objective on shares of Zscaler from $265.00 to $230.00 and set an "outperform" rating on the stock in a research report on Wednesday. Finally, Rosenblatt Securities decreased their price objective on shares of Zscaler from $250.00 to $223.00 and set a "buy" rating on the stock in a research report on Monday, May 18th. Two equities research analysts have rated the stock with a Strong Buy rating, twenty-nine have assigned a Buy rating, seven have given a Hold rating and three have given a Sell rating to the company. According to MarketBeat, Zscaler currently has an average rating of "Moderate Buy" and an average target price of $245.80.

Zscaler Price Performance

Shares of NASDAQ:ZS opened at $184.60 on Wednesday. The stock has a market cap of $29.68 billion, a PE ratio of -439.52 and a beta of 0.96. The company's fifty day moving average is $145.75 and its 200 day moving average is $192.65. Zscaler has a 52 week low of $114.63 and a 52 week high of $336.99. The company has a quick ratio of 1.90, a current ratio of 1.90 and a debt-to-equity ratio of 0.78.

Zscaler (NASDAQ:ZS - Get Free Report) last issued its earnings results on Tuesday, May 26th. The company reported $1.08 EPS for the quarter, topping analysts' consensus estimates of $1.01 by $0.07. The company had revenue of $850.48 million for the quarter, compared to analysts' expectations of $835.60 million. Zscaler had a negative net margin of 2.25% and a positive return on equity of 0.06%. The firm's revenue was up 25.4% compared to the same quarter last year. During the same quarter last year, the company earned $0.84 EPS. Zscaler has set its Q4 2026 guidance at 1.080-1.090 EPS and its FY 2026 guidance at 4.100-4.110 EPS. Research analysts anticipate that Zscaler will post -0.03 earnings per share for the current year.

Insider Buying and Selling at Zscaler

In related news, CFO Kevin Rubin sold 1,682 shares of the business's stock in a transaction dated Tuesday, March 17th. The shares were sold at an average price of $156.59, for a total transaction of $263,384.38. Following the sale, the chief financial officer owned 46,479 shares of the company's stock, valued at $7,278,146.61. The trade was a 3.49% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available at this link. Also, Director James A. Beer sold 177 shares of the business's stock in a transaction dated Wednesday, March 18th. The stock was sold at an average price of $153.53, for a total transaction of $27,174.81. Following the sale, the director directly owned 4,384 shares in the company, valued at $673,075.52. The trade was a 3.88% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders have sold a total of 12,130 shares of company stock valued at $1,892,487 over the last three months. 17.20% of the stock is currently owned by corporate insiders.

Institutional Investors Weigh In On Zscaler

Several hedge funds have recently bought and sold shares of ZS. Integrated Wealth Concepts LLC boosted its stake in Zscaler by 19.9% during the first quarter. Integrated Wealth Concepts LLC now owns 1,439 shares of the company's stock worth $285,000 after acquiring an additional 239 shares in the last quarter. NewEdge Advisors LLC boosted its stake in Zscaler by 8.2% during the first quarter. NewEdge Advisors LLC now owns 4,899 shares of the company's stock worth $972,000 after acquiring an additional 370 shares in the last quarter. Empowered Funds LLC boosted its stake in Zscaler by 9.2% during the first quarter. Empowered Funds LLC now owns 2,811 shares of the company's stock worth $558,000 after acquiring an additional 238 shares in the last quarter. Sivia Capital Partners LLC bought a new stake in Zscaler during the second quarter worth about $252,000. Finally, Jump Financial LLC bought a new stake in Zscaler during the second quarter worth about $3,019,000. Institutional investors own 46.45% of the company's stock.

Key Stories Impacting Zscaler

Here are the key news stories impacting Zscaler this week:

• Positive Sentiment: Zscaler reported fiscal Q3 revenue of $850.5 million, up 25% year over year, and EPS of $1.08, both ahead of estimates, showing continued execution and demand for its cloud security platform. Zscaler Announces Strong Third-Quarter Fiscal 2026 Results
• Positive Sentiment: The company raised full-year fiscal 2026 EPS guidance, signaling confidence in profitability despite ongoing investment in growth and AI security initiatives. ZS Q3 Earnings Call Flags Prudent Growth Outlook
• Positive Sentiment: B. Riley upgraded Zscaler to Buy from Neutral, citing product-line expansion and improving business momentum, though the firm lowered its price target. B.Riley Upgrades Zscaler (ZS) Rating to Buy Amid Product Line Expansion
• Neutral Sentiment: Zscaler continued to emphasize AI security as a growth driver, and commentary around record margins and recurring revenue suggests the long-term story remains intact. ZS Q3 Earnings Call Flags Prudent Growth Outlook
• Negative Sentiment: Investors reacted to weaker fourth-quarter revenue guidance and a lower free cash flow outlook, suggesting tougher near-term demand conditions and more cautious spending by customers. Zscaler sees downbeat quarterly revenue as competition heats up in cybersecurity market
• Negative Sentiment: Several reports noted that competition is heating up in cybersecurity, which is weighing on sentiment around Zscaler’s ability to sustain rapid growth and premium valuation. Zscaler tumbles as mixed guidance outshines strong Q3 results

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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