Zscaler (NASDAQ:ZS) Shares Gap Down – Here’s Why

Shares of Zscaler, Inc. (NASDAQ:ZS) gapped down prior to trading on Thursday. The stock had previously closed at $255.80, but opened at $235.51. Zscaler shares last traded at $251.3570, with a volume of 627,849 shares trading hands.

Wall Street Analyst Weigh In

Several research firms have recently issued reports on ZS. Stephens raised their price target on Zscaler from $225.00 to $265.00 and gave the stock an “overweight” rating in a research report on Wednesday, October 7th. TD Cowen upped their price objective on Zscaler from $200.00 to $230.00 and gave the company a “buy” rating in a report on Wednesday, October 7th. Citigroup increased their target price on Zscaler from $245.00 to $260.00 and gave the company a “buy” rating in a research note on Thursday, October 15th. Jefferies Financial Group raised their target price on Zscaler from $220.00 to $250.00 and gave the stock a “buy” rating in a report on Wednesday, October 7th. Finally, Truist Financial restated a “buy” rating and set a $250.00 target price (up from $200.00) on shares of Zscaler in a research report on Wednesday, October 7th. Thirty-six research analysts have rated the stock with a Buy rating, eight have assigned a Hold rating and one has assigned a Sell rating to the stock. According to MarketBeat.com, the stock has an average rating of “Moderate Buy” and an average target price of $236.65.

Zscaler Trading Down 4.0%

The firm has a market capitalization of $38.78 billion, a price-to-earnings ratio of -609.82, a price-to-earnings-growth ratio of 23.56 and a beta of 0.94. The business’s fifty day moving average is $204.19 and its 200 day moving average is $167.61. The company has a quick ratio of 1.70, a current ratio of 1.70 and a debt-to-equity ratio of 0.65.

Zscaler (NASDAQ:ZS) last announced its earnings results on Thursday, September 3rd. The company reported $1.19 earnings per share for the quarter, topping analysts’ consensus estimates of $1.09 by $0.10. Zscaler had a negative net margin of 1.88% and a positive return on equity of 1.23%. The firm had revenue of $898.19 million during the quarter, compared to analyst estimates of $876.96 million. During the same period in the prior year, the business earned $0.89 EPS. The company’s revenue for the quarter was up 24.9% compared to the same quarter last year. Zscaler has set its FY 2027 guidance at 4.860-4.900 EPS and its Q1 2027 guidance at 1.150-1.160 EPS. Equities analysts predict that Zscaler, Inc. will post 0.70 earnings per share for the current year.

Insider Transactions at Zscaler

In other news, insider Robert Schlossman sold 5,394 shares of the firm’s stock in a transaction that occurred on Monday, September 21st. The shares were sold at an average price of $200.00, for a total transaction of $1,078,800.00. Following the completion of the transaction, the insider directly owned 61,525 shares of the company’s stock, valued at $12,305,000. This trade represents a 8.06% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director James A. Beer sold 177 shares of Zscaler stock in a transaction that occurred on Thursday, September 17th. The shares were sold at an average price of $192.01, for a total transaction of $33,985.77. Following the completion of the sale, the director owned 4,030 shares in the company, valued at $773,800.30. This trade represents a 4.21% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last quarter, insiders have sold 54,064 shares of company stock worth $11,316,078. 17.20% of the stock is currently owned by insiders.

Institutional Inflows and Outflows

Large investors have recently added to or reduced their stakes in the business. Handelsbanken Fonder AB lifted its stake in Zscaler by 89.6% in the 2nd quarter. Handelsbanken Fonder AB now owns 60,933 shares of the company’s stock valued at $8,601,000 after purchasing an additional 28,792 shares during the last quarter. Assenagon Asset Management S.A. grew its holdings in Zscaler by 6.6% during the second quarter. Assenagon Asset Management S.A. now owns 193,297 shares of the company’s stock worth $27,284,000 after purchasing an additional 11,941 shares during the period. Bank of America Corp DE increased its position in Zscaler by 44.3% during the first quarter. Bank of America Corp DE now owns 779,245 shares of the company’s stock worth $109,320,000 after buying an additional 239,326 shares during the last quarter. Krilogy Financial LLC increased its position in Zscaler by 163.0% during the third quarter. Krilogy Financial LLC now owns 11,008 shares of the company’s stock worth $2,195,000 after buying an additional 6,822 shares during the last quarter. Finally, Danica Pension Livsforsikringsaktieselskab acquired a new position in Zscaler during the second quarter worth approximately $11,232,000. Institutional investors and hedge funds own 46.45% of the company’s stock.

Zscaler Company Profile

Zscaler, Inc is a cloud-based cybersecurity company that helps organizations secure access to applications, websites, data and other digital resources. Its platform is designed around a zero-trust security model, which verifies users and devices and enforces security policies before granting access, rather than relying primarily on a traditional corporate network perimeter.

The company’s offerings include Zscaler Internet Access, which provides secure access to internet and software-as-a-service applications, and Zscaler Private Access, which enables secure access to private applications without extending an organization’s network to users.