Zscaler (NASDAQ:ZS) Shares Down 2.6% – What’s Next?

Zscaler, Inc. (NASDAQ:ZS)’s share price was down 2.6% during mid-day trading on Tuesday . The company traded as low as $120.85 and last traded at $125.84. Approximately 4,752,210 shares were traded during mid-day trading, an increase of 32% from the average daily volume of 3,598,024 shares. The stock had previously closed at $129.25.

Key Stories Impacting Zscaler

Here are the key news stories impacting Zscaler this week:

• Positive Sentiment: Zscaler unveiled new AI-security products for “agentic AI,” including Zero Trust controls for AI agents, AI Broker, Endpoint AI Security, and AI Access Graph, which could strengthen its competitive position and support future demand. Zscaler Unveils New Product Innovations to Secure Agentic AI
• Positive Sentiment: The company expanded Project AI-Guardian with major technology partners such as AWS, Google Cloud, OpenAI, Databricks, and Saviynt, signaling broader ecosystem adoption and potential cross-selling opportunities. Zscaler Expands AI-Guardian, Uniting Tech Giants to Secure Enterprise AI at Scale
• Positive Sentiment: Zscaler said the AI-security market is being reshaped by autonomous agents, reinforcing its growth narrative as enterprises look for new ways to secure AI workloads. Zscaler CEO: AI Will Create ‘Billions of Agents’ That Need Cybersecurity Protection
• Neutral Sentiment: Radiant Logic announced a partnership with Zscaler to improve Day 1 access for M&A identity workflows, adding another integration to its zero-trust ecosystem. Radiant Logic Forms Technology Partnership with Zscaler
• Negative Sentiment: Multiple legal notices and a securities class-action deadline reminder are adding an overhang, which can pressure sentiment even if they do not yet imply a final adverse outcome. ZS DEADLINE: The Gross Law Firm Reminds Zscaler Investors
• Negative Sentiment: Separate law-firm investigations into possible securities law violations may be contributing to caution around the name. ZS Investors Have Opportunity to Join Zscaler Fraud Investigation
• Negative Sentiment: Recent insider activity remains one-sided, with 18 open-market sales and no purchases over the last six months, which can weigh on investor confidence. Quiver AI Summary on Zscaler Innovations

Analyst Ratings Changes

A number of analysts recently commented on the stock. Cantor Fitzgerald lowered their target price on shares of Zscaler from $300.00 to $225.00 and set an “overweight” rating for the company in a research note on Wednesday, May 27th. TD Cowen reiterated a “buy” rating on shares of Zscaler in a research note on Wednesday, May 27th. The Goldman Sachs Group reiterated a “neutral” rating and issued a $179.00 target price on shares of Zscaler in a research note on Wednesday, May 27th. B. Riley Financial lowered their target price on shares of Zscaler from $225.00 to $215.00 and set a “buy” rating for the company in a research note on Wednesday, May 27th. Finally, Wedbush lowered their target price on shares of Zscaler from $300.00 to $220.00 and set an “outperform” rating for the company in a research note on Wednesday, May 27th. Thirty-three equities research analysts have rated the stock with a Buy rating, six have given a Hold rating and one has given a Sell rating to the company’s stock. According to data from MarketBeat, the stock has a consensus rating of “Moderate Buy” and an average target price of $216.03.

Zscaler Stock Performance

The company has a debt-to-equity ratio of 0.72, a quick ratio of 1.86 and a current ratio of 1.86. The firm’s 50 day simple moving average is $143.37 and its 200 day simple moving average is $181.49. The firm has a market capitalization of $20.35 billion, a price-to-earnings ratio of -262.16 and a beta of 0.97.

Zscaler (NASDAQ:ZS) last announced its quarterly earnings data on Tuesday, May 26th. The company reported $1.08 EPS for the quarter, beating 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 business had revenue of $850.48 million during the quarter, compared to analysts’ expectations of $835.14 million. During the same period in the previous year, the business posted $0.84 EPS. The business’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. Sell-side analysts forecast that Zscaler, Inc. will post -0.03 earnings per share for the current fiscal year.

Insider Buying and Selling at Zscaler

In other Zscaler news, insider Adam Geller sold 2,094 shares of Zscaler stock in a transaction that occurred on Wednesday, March 18th. The shares were sold at an average price of $153.53, for a total transaction of $321,491.82. Following the completion of the sale, the insider directly owned 46,949 shares in the company, valued at approximately $7,208,079.97. The trade was a 4.27% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is accessible through the SEC website. Also, Director James A. Beer sold 177 shares of Zscaler stock in a transaction that occurred on Wednesday, March 18th. The shares were sold at an average price of $153.53, for a total transaction of $27,174.81. Following the sale, the director owned 4,384 shares of the company’s stock, valued at approximately $673,075.52. The trade was a 3.88% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. In the last 90 days, insiders sold 12,130 shares of company stock worth $1,892,487. Corporate insiders own 17.20% of the company’s stock.

Hedge Funds Weigh In On Zscaler

Several institutional investors have recently made changes to their positions in the company. Bessemer Group Inc. increased its holdings in shares of Zscaler by 3.2% during the 3rd quarter. Bessemer Group Inc. now owns 1,021 shares of the company’s stock valued at $306,000 after purchasing an additional 32 shares in the last quarter. Wedbush Securities Inc. increased its holdings in shares of Zscaler by 0.7% during the 3rd quarter. Wedbush Securities Inc. now owns 5,129 shares of the company’s stock valued at $1,537,000 after purchasing an additional 34 shares in the last quarter. Goldstream Capital Management Ltd increased its holdings in shares of Zscaler by 0.3% during the 3rd quarter. Goldstream Capital Management Ltd now owns 12,450 shares of the company’s stock valued at $3,731,000 after purchasing an additional 34 shares in the last quarter. Kentucky Retirement Systems Insurance Trust Fund increased its holdings in shares of Zscaler by 1.4% during the 3rd quarter. Kentucky Retirement Systems Insurance Trust Fund now owns 2,569 shares of the company’s stock valued at $770,000 after purchasing an additional 36 shares in the last quarter. Finally, Advisor OS LLC increased its holdings in shares of Zscaler by 4.6% during the 3rd quarter. Advisor OS LLC now owns 879 shares of the company’s stock valued at $263,000 after purchasing an additional 39 shares in the last quarter. 46.45% of the stock is owned by hedge funds and other institutional investors.

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.