Zscaler (NASDAQ:ZS) Stock Rating Lowered by Zacks Research

Zscaler (NASDAQ:ZS) was downgraded by analysts at Zacks Research from a “hold” rating to a “strong sell” rating in a research note issued on Thursday,Zacks.com reports.

Several other equities research analysts also recently weighed in on the stock. KeyCorp decreased their price target on shares of Zscaler from $300.00 to $250.00 and set an “overweight” rating for the company in a research note on Tuesday, February 17th. Berenberg Bank reduced their target price on Zscaler from $390.00 to $320.00 and set a “buy” rating for the company in a research note on Friday. Loop Capital set a $320.00 price target on Zscaler in a research note on Thursday, December 11th. Piper Sandler cut their price target on Zscaler from $260.00 to $185.00 and set a “neutral” rating on the stock in a report on Friday. Finally, Citigroup decreased their price objective on Zscaler from $350.00 to $305.00 and set a “buy” rating for the company in a report on Tuesday, January 13th. One analyst has rated the stock with a Strong Buy rating, thirty-four have given a Buy rating, six have assigned a Hold rating and two have assigned a Sell rating to the company’s stock. According to data from MarketBeat, the company has an average rating of “Moderate Buy” and a consensus target price of $274.37.

Zscaler Trading Down 12.2%

ZS stock traded down $20.37 during mid-day trading on Thursday, reaching $146.99. The company’s stock had a trading volume of 11,080,725 shares, compared to its average volume of 3,018,555. Zscaler has a 12 month low of $140.56 and a 12 month high of $336.99. The company has a current ratio of 1.82, a quick ratio of 1.82 and a debt-to-equity ratio of 0.86. The business’s 50 day moving average price is $198.92 and its 200 day moving average price is $255.20. The company has a market cap of $23.44 billion, a price-to-earnings ratio of -349.98, a price-to-earnings-growth ratio of 341.17 and a beta of 1.02.

Zscaler (NASDAQ:ZS) last posted its quarterly earnings results on Thursday, February 26th. The company reported $1.01 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.89 by $0.12. The firm had revenue of $815.75 million for the quarter, compared to analysts’ expectations of $798.92 million. Zscaler had a positive return on equity of 0.06% and a negative net margin of 2.25%.The company’s revenue for the quarter was up 25.9% compared to the same quarter last year. During the same period in the prior year, the business earned $0.78 EPS. Zscaler has set its Q3 2026 guidance at 1.000-1.010 EPS and its FY 2026 guidance at 3.990-4.020 EPS. On average, equities research analysts predict that Zscaler will post -0.1 EPS for the current year.

Insider Activity at Zscaler

In other news, CFO Kevin Rubin sold 3,303 shares of Zscaler stock in a transaction that occurred on Tuesday, December 16th. The stock was sold at an average price of $230.82, for a total value of $762,398.46. Following the sale, the chief financial officer directly owned 48,161 shares in the company, valued at approximately $11,116,522.02. This trade represents a 6.42% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, EVP Raj Judge sold 3,438 shares of the company’s stock in a transaction that occurred on Tuesday, December 16th. The shares were sold at an average price of $230.82, for a total value of $793,559.16. Following the transaction, the executive vice president owned 70,394 shares of the company’s stock, valued at approximately $16,248,343.08. This represents a 4.66% decrease in their position. The SEC filing for this sale provides additional information. Insiders have sold 19,350 shares of company stock worth $4,471,509 over the last 90 days. 17.20% of the stock is owned by insiders.

Institutional Inflows and Outflows

Institutional investors have recently made changes to their positions in the company. Vanguard Group Inc. raised its stake in Zscaler by 0.5% during the fourth quarter. Vanguard Group Inc. now owns 11,423,424 shares of the company’s stock valued at $2,569,357,000 after buying an additional 55,521 shares during the last quarter. Groupama Asset Managment increased its holdings in shares of Zscaler by 76,352.6% during the third quarter. Groupama Asset Managment now owns 4,750,000 shares of the company’s stock valued at $1,423,385,000 after acquiring an additional 4,743,787 shares in the last quarter. First Trust Advisors LP raised its position in shares of Zscaler by 15.9% in the 4th quarter. First Trust Advisors LP now owns 2,582,897 shares of the company’s stock worth $580,945,000 after purchasing an additional 354,763 shares during the last quarter. Price T Rowe Associates Inc. MD boosted its stake in Zscaler by 43.3% in the 4th quarter. Price T Rowe Associates Inc. MD now owns 2,572,358 shares of the company’s stock worth $578,576,000 after purchasing an additional 777,414 shares in the last quarter. Finally, State Street Corp boosted its stake in Zscaler by 3.4% in the 4th quarter. State Street Corp now owns 2,337,604 shares of the company’s stock worth $525,774,000 after purchasing an additional 77,800 shares in the last quarter. Institutional investors own 46.45% of the company’s stock.

Trending Headlines about Zscaler

Here are the key news stories impacting Zscaler this week:

• Positive Sentiment: Q2 results beat: adjusted EPS $1.01 vs. $0.89 est., revenue $815.8M vs. ~$799M est., and ARR grew ~25% year/year — signals demand momentum. GlobeNewswire: Q2 Results
• Positive Sentiment: Management is pitching AI security growth and new initiatives (AI Guard, agentic security, India AI/Cyber center with Airtel) as durable secular drivers that expand TAM beyond seat-based SaaS. CFO Interview Airtel AI Center
• Neutral Sentiment: Management issued updated forward guidance and commentary (Q3 EPS range and FY EPS range were provided), creating mixed signals that markets are parsing. Earnings Highlights
• Neutral Sentiment: Executives (CEO & CFO) gave interviews and the full call transcript is available — useful for investors wanting detail on churn, acquisitions and how AI monetization will scale. Earnings Call Transcript
• Negative Sentiment: Wider GAAP loss and higher spending: the company posted a larger net loss driven by increased sales, marketing and R&D, which pressured investor sentiment. Reuters: Wider Loss
• Negative Sentiment: Mixed/uncertain revenue outlook commentary: some outlets reported the company lowered aspects of its revenue outlook, creating confusion and weighing on the stock despite EPS beats. Benzinga: Revenue Guidance Report
• Negative Sentiment: Broad analyst price‑target cuts today from multiple firms (Canaccord, Morgan Stanley, Oppenheimer, Berenberg, Needham, and others) have amplified selling pressure even as many kept “buy/outperform” stances — the cuts compress perception of near‑term upside. MarketScreener: Analyst Cuts
• Negative Sentiment: Market reaction: investors appear to be focusing on margin/expense trajectory, competitive pressure and near-term revenue clarity rather than the company’s AI growth story — producing the stock decline. Seeking Alpha: Market Reaction

Zscaler Company Profile

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.