Zscaler (NASDAQ:ZS – Get Free Report) was downgraded by analysts at Zacks Research from a “hold” rating to a “strong sell” rating in a research report issued to clients and investors on Thursday, Zacks reports.
ZS has been the topic of several other reports. UBS Group reduced their price objective on shares of Zscaler from $260.00 to $225.00 and set a “buy” rating on the stock in a report on Wednesday, May 27th. The Goldman Sachs Group reiterated a “neutral” rating and set a $179.00 price target on shares of Zscaler in a research report on Wednesday, May 27th. Needham & Company LLC boosted their price target on shares of Zscaler from $180.00 to $215.00 and gave the company a “buy” rating in a research note on Friday. Berenberg Bank set a $200.00 price objective on shares of Zscaler in a research report on Thursday, May 28th. Finally, Weiss Ratings raised shares of Zscaler from a “sell (e+)” rating to a “sell (d-)” rating in a research report on Thursday, August 27th. Thirty-four equities research analysts have rated the stock with a Buy rating, five have given a Hold rating and two have issued a Sell rating to the company’s stock. According to MarketBeat.com, the company has an average rating of “Moderate Buy” and a consensus price target of $217.08.
Check Out Our Latest Stock Report on Zscaler
Zscaler Trading Down 4.5%
Zscaler (NASDAQ:ZS – Get Free Report) last posted its earnings results on Thursday, September 3rd. The company reported $1.19 EPS for the quarter, beating analysts’ consensus estimates of $1.09 by $0.10. Zscaler had a positive return on equity of 1.29% and a negative net margin of 1.88%.The company had revenue of $898.19 million for the quarter, compared to the consensus estimate of $876.96 million. During the same quarter in the previous year, the business earned $0.89 earnings per share. The company’s revenue for the quarter was up 24.9% on a year-over-year basis. Zscaler has set its FY 2027 guidance at 4.860-4.900 EPS and its Q1 2027 guidance at 1.150-1.160 EPS. As a group, research analysts predict that Zscaler will post 0.13 earnings per share for the current year.
Insider Buying and Selling at Zscaler
In other Zscaler news, insider Robert Schlossman sold 3,146 shares of the business’s stock in a transaction on Tuesday, June 16th. The shares were sold at an average price of $126.43, for a total value of $397,748.78. Following the completion of the transaction, the insider owned 69,366 shares in the company, valued at $8,769,943.38. The trade was a 4.34% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available at the SEC website. 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 the company’s 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 directly owned 42,314 shares in the company, valued at $5,187,696.40. This represents a 6.24% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold 16,772 shares of company stock valued at $2,139,799 over the last three months. 17.20% of the stock is currently owned by company insiders.
Institutional Investors Weigh In On Zscaler
A number of hedge funds have recently bought and sold shares of the stock. Integrated Wealth Concepts LLC raised its holdings in Zscaler by 19.9% in the first quarter. Integrated Wealth Concepts LLC now owns 1,439 shares of the company’s stock valued at $285,000 after acquiring an additional 239 shares in the last quarter. NewEdge Advisors LLC raised its stake in Zscaler by 8.2% in the first quarter. NewEdge Advisors LLC now owns 4,899 shares of the company’s stock valued at $972,000 after buying an additional 370 shares in the last quarter. Empowered Funds LLC lifted its holdings in Zscaler by 9.2% during the 1st quarter. Empowered Funds LLC now owns 2,811 shares of the company’s stock worth $558,000 after buying an additional 238 shares during the last quarter. Sivia Capital Partners LLC purchased a new stake in Zscaler during the 2nd quarter worth about $252,000. Finally, Jump Financial LLC acquired a new position in shares of Zscaler during the 2nd quarter worth about $3,019,000. Institutional investors and hedge funds own 46.45% of the company’s stock.
Key Zscaler News
Here are the key news stories impacting Zscaler this week:
- Positive Sentiment: Strong fiscal fourth-quarter results: Zscaler reported adjusted EPS of $1.19 versus the $1.09 consensus and revenue of $898.2 million versus $877.0 million expected. Revenue and annual recurring revenue (ARR) each increased 25% year over year, while non-GAAP operating margin reached a record 24%. Zscaler Announces Strong Fourth Quarter and Fiscal 2026 Financial Results
- Positive Sentiment: AI and platform demand remain catalysts: Management highlighted growing demand for Security for AI, Agentic SecOps, non-seat-based products and large enterprise deals. Analysts including Baird, Stephens, Needham, Canaccord and Cantor raised price targets, generally citing the earnings beat and potential for conservative guidance to be exceeded. Zscaler Analysts Boost Their Forecasts After Better-Than-Expected Q4 Earnings
- Neutral Sentiment: Analyst opinion is divided: Some analysts called the fiscal 2027 outlook overly cautious and maintained bullish ratings, while others noted that the forecast reflects competitive pressure, the Red Canary acquisition and a more measured growth profile.
- Negative Sentiment: Fiscal 2027 growth is expected to decelerate: Zscaler guided for revenue growth of 16.6% to 17.5% and ARR growth of 16.6% to 17.4%, well below the 25% growth delivered in fiscal 2026. The slower outlook overshadowed the quarterly beat and renewed valuation concerns for high-growth cybersecurity stocks. Zscaler Fiscal 2027 Growth Forecast
- Negative Sentiment: Free cash flow weakened sharply: Fourth-quarter free cash flow fell 65% year over year to $60.8 million, versus approximately $66.9 million expected, as capital expenditures and internal-use software spending increased. Zscaler also announced a restructuring affecting about 3% of its workforce, adding execution concerns. Zscaler Shares Fall Despite Earnings Beat
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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