Zacks Research Upgrades Zscaler (NASDAQ:ZS) to “Hold”

Zscaler (NASDAQ:ZS) was upgraded by equities researchers at Zacks Research from a “strong sell” rating to a “hold” rating in a report released on Wednesday,Zacks.com reports.

Several other equities analysts have also weighed in on the stock. B. Riley Financial dropped their price objective on shares of Zscaler from $225.00 to $215.00 and set a “buy” rating on the stock in a research report on Wednesday. Truist Financial set a $210.00 price objective on shares of Zscaler in a research report on Wednesday. Canaccord Genuity Group dropped their price objective on shares of Zscaler from $275.00 to $210.00 and set a “buy” rating on the stock in a research report on Wednesday. HC Wainwright raised shares of Zscaler from a “buy” rating to a “buy” rating in a research report on Monday, May 18th. Finally, Needham & Company LLC reissued a “buy” rating and issued a $180.00 price objective on shares of Zscaler in a research report on Wednesday. Thirty-two equities research analysts have rated the stock with a Buy rating, eight have given a Hold rating and one has issued a Sell rating to the company. According to data from MarketBeat.com, Zscaler has an average rating of “Moderate Buy” and a consensus price target of $216.08.

Zscaler Stock Performance

NASDAQ ZS opened at $130.04 on Wednesday. The company has a current ratio of 1.86, a quick ratio of 1.90 and a debt-to-equity ratio of 0.72. The firm’s fifty day moving average price is $144.69 and its two-hundred day moving average price is $189.97. Zscaler has a 1 year low of $114.63 and a 1 year high of $336.99. The firm has a market capitalization of $21.03 billion, a P/E ratio of -270.91 and a beta of 0.96.

Zscaler (NASDAQ:ZS) last posted its quarterly earnings results on Tuesday, May 26th. The company reported $1.08 earnings per share (EPS) for the quarter, topping the consensus estimate 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 in the prior year, the firm posted $0.84 earnings per share. The company’s quarterly revenue 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. As a group, research analysts anticipate that Zscaler will post -0.03 EPS for the current year.

Insider Buying and Selling at Zscaler

In related news, EVP Raj Judge sold 2,488 shares of the firm’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 $389,595.92. Following the transaction, the executive vice president directly owned 67,906 shares of the company’s stock, valued at approximately $10,633,400.54. This trade represents a 3.53% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. Also, insider Adam Geller sold 2,094 shares of the firm’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 $321,491.82. Following the transaction, the insider directly owned 46,949 shares in the company, valued at approximately $7,208,079.97. This represents a 4.27% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders sold 12,130 shares of company stock valued at $1,892,487 in the last quarter. Company insiders own 17.20% of the company’s stock.

Institutional Investors Weigh In On Zscaler

Large investors have recently added to or reduced their stakes in the stock. Binnacle Investments Inc acquired a new stake in Zscaler during the third quarter worth approximately $25,000. Picton Mahoney Asset Management acquired a new stake in Zscaler during the third quarter worth approximately $30,000. AlphaCentric Advisors LLC acquired a new stake in Zscaler during the fourth quarter worth approximately $29,000. University of Texas Texas AM Investment Management Co. acquired a new stake in Zscaler during the fourth quarter worth approximately $30,000. Finally, Mcguire Capital Advisors Inc. acquired a new stake in Zscaler during the fourth quarter worth approximately $32,000. Institutional investors and hedge funds own 46.45% of the company’s stock.

Trending Headlines about Zscaler

Here are the key news stories impacting Zscaler this week:

• Positive Sentiment: Zscaler beat quarterly expectations, with revenue and earnings topping estimates and annual recurring revenue still growing strongly, which suggests underlying demand remains healthy.
• Positive Sentiment: Several analysts reiterated positive ratings after the report, arguing that strong net retention and Zero Trust demand could support a recovery if execution improves.
• Neutral Sentiment: Multiple law firms announced investigations into possible securities claims after the stock’s decline, adding headline noise but not changing fundamentals directly.
• Negative Sentiment: The company’s cautious forward guidance, especially for revenue growth and customer acquisition, raised concerns that growth may slow more than investors expected.
• Negative Sentiment: Management pointed to sales leadership departures and a transition in the sales organization, which fueled worries about near-term pipeline and execution risk.

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.