Zscaler (NASDAQ:ZS) Shares Gap Up – Still a Buy?

Shares of Zscaler, Inc. (NASDAQ:ZS) gapped up before the market opened on Monday . The stock had previously closed at $164.54, but opened at $172.80. Zscaler shares last traded at $180.5910, with a volume of 1,042,948 shares.

Key Zscaler News

Here are the key news stories impacting Zscaler this week:

• Positive Sentiment: ZS benefited from a broad cybersecurity-sector rally after warnings about AI safety risks increased expectations for demand for security software. Zscaler rose alongside CrowdStrike and Palo Alto Networks as investors viewed cybersecurity as a key defense against emerging AI threats. Zscaler Stock Jumps 17% as AI Safety Comments Drive Cybersecurity Rally
• Positive Sentiment: Management said AI is “the largest tailwind we have ever seen,” supporting the long-term demand outlook for Zscaler’s cloud security platform. The company ended fiscal 2026 with approximately 25% annual recurring revenue growth, reinforcing its position as an AI-related cybersecurity beneficiary. Zscaler’s AI Story Is Accelerating, Its Growth Guide Isn’t
• Neutral Sentiment: Options activity was unusually heavy, with traders buying 34,160 call contracts—about 22% above typical daily call volume. The activity may signal bullish positioning, but it does not guarantee sustained buying in the shares.
• Negative Sentiment: The main concern is that fiscal 2027 guidance points to growth slowing to roughly 17%, or the mid-teens, from 25% in fiscal 2026. That creates a disconnect between management’s strong AI commentary and its more cautious near-term outlook. Zscaler ARR Growth and Fiscal 2027 Guidance
• Negative Sentiment: Valuation remains demanding after a roughly 48% three-month gain. Near $190, ZS trades at about 9.3 times sales versus approximately 3.2 times for the S&P 500, leaving the stock vulnerable if growth decelerates more than expected. What Growth Are You Paying For In Zscaler Stock?

Wall Street Analysts Forecast Growth

Several brokerages have recently commented on ZS. Weiss Ratings lowered Zscaler from a “sell (d-)” rating to a “sell (e+)” rating in a research report on Thursday, September 10th. TD Cowen reaffirmed a “buy” rating and issued a $200.00 target price on shares of Zscaler in a research note on Friday, September 4th. Stifel Nicolaus lifted their price target on shares of Zscaler from $175.00 to $200.00 and gave the stock a “buy” rating in a research note on Wednesday, August 19th. JPMorgan Chase & Co. boosted their price objective on shares of Zscaler from $205.00 to $215.00 and gave the stock an “overweight” rating in a report on Wednesday, August 26th. Finally, Wells Fargo & Company lifted their target price on shares of Zscaler from $210.00 to $215.00 and gave the stock an “overweight” rating in a research report on Friday, September 4th. Thirty-four research analysts have rated the stock with a Buy rating, six have given a Hold rating and two have given a Sell rating to the company’s stock. According to data from MarketBeat, Zscaler currently has an average rating of “Moderate Buy” and an average target price of $216.53.

Zscaler Stock Up 1.1%

The company’s fifty day simple moving average is $165.10 and its 200 day simple moving average is $150.97. The company has a current ratio of 1.70, a quick ratio of 1.70 and a debt-to-equity ratio of 0.65. The firm has a market capitalization of $31.61 billion, a P/E ratio of -497.15, a price-to-earnings-growth ratio of 23.07 and a beta of 0.95.

Zscaler (NASDAQ:ZS) last released its quarterly earnings results on Thursday, September 3rd. The company reported $1.19 earnings per share (EPS) 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 company had revenue of $898.19 million during the quarter, compared to the consensus estimate of $876.96 million. During the same period in the prior year, the firm earned $0.89 earnings per share. Zscaler’s revenue 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. Research analysts expect that Zscaler, Inc. will post 0.61 EPS for the current year.

Insider Activity at Zscaler

In related news, 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 of the company’s stock, valued at $5,187,696.40. This represents a 6.24% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Kevin Rubin sold 3,000 shares of the company’s stock in a transaction on Thursday, June 25th. The stock was sold at an average price of $124.22, for a total value of $372,660.00. Following the completion of the sale, the chief financial officer directly owned 41,901 shares in the company, valued at approximately $5,204,942.22. The trade was a 6.68% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 6,945 shares of company stock valued at $897,536 in the last three months. Corporate insiders own 17.20% of the company’s stock.

Institutional Trading of Zscaler

Hedge funds have recently modified their holdings of the business. BlackRock Inc. bought a new stake in Zscaler in the second quarter worth $1,396,028,000. First Trust Advisors LP increased its holdings in shares of Zscaler by 36.2% during the first quarter. First Trust Advisors LP now owns 3,518,678 shares of the company’s stock valued at $493,635,000 after acquiring an additional 935,781 shares in the last quarter. Connor Clark & Lunn Investment Management Ltd. bought a new position in shares of Zscaler during the second quarter valued at $102,271,000. Pictet Asset Management Holding SA raised its position in shares of Zscaler by 52.5% in the 1st quarter. Pictet Asset Management Holding SA now owns 1,920,540 shares of the company’s stock worth $269,285,000 after purchasing an additional 661,413 shares during the last quarter. Finally, Legal & General Group Plc purchased a new position in shares of Zscaler in the 2nd quarter worth about $89,740,000. Institutional investors own 46.45% of the company’s stock.

Zscaler Company Profile

Zscaler, Inc is a cloud-native cybersecurity company that provides security services designed to help organizations connect users, devices, applications and workloads securely over the internet. Its platform is built around a zero-trust security model, which verifies access based on identity, context and policy rather than relying primarily on a traditional corporate network perimeter.

The company’s offerings include Zscaler Internet Access, which secures access to internet and software-as-a-service applications, and Zscaler Private Access, which provides secure, policy-based access to private applications without requiring conventional virtual private networks.