Zscaler (NASDAQ:ZS) Shares Gap Down on Analyst Downgrade

Shares of Zscaler, Inc. (NASDAQ:ZS) gapped down before the market opened on Wednesday after Cantor Fitzgerald lowered their price target on the stock from $300.00 to $225.00. The stock had previously closed at $184.60, but opened at $137.16. Cantor Fitzgerald currently has an overweight rating on the stock. Zscaler shares last traded at $128.9870, with a volume of 7,307,978 shares changing hands.

A number of other analysts have also recently weighed in on ZS. Berenberg Bank dropped their target price on shares of Zscaler from $390.00 to $320.00 and set a “buy” rating on the stock in a report on Friday, February 27th. Scotiabank decreased their price target on shares of Zscaler from $190.00 to $175.00 and set a “sector outperform” rating for the company in a report on Wednesday. Citigroup reaffirmed a “market outperform” rating on shares of Zscaler in a research report on Wednesday. Canaccord Genuity Group dropped their price objective on shares of Zscaler from $275.00 to $210.00 and set a “buy” rating on the stock in a research note on Wednesday. Finally, BTIG Research reissued a “neutral” rating on shares of Zscaler in a report on Thursday, April 9th. Two research analysts have rated the stock with a Strong Buy rating, thirty have issued a Buy rating, eight have given a Hold rating and two have assigned a Sell rating to the stock. According to data from MarketBeat, the stock presently has a consensus rating of “Moderate Buy” and an average target price of $226.58.

Insider Transactions at Zscaler

In other Zscaler news, EVP Raj Judge sold 2,488 shares of the business’s stock in a transaction dated Tuesday, March 17th. The shares were sold at an average price of $156.59, for a total transaction of $389,595.92. Following the completion of the transaction, the executive vice president directly owned 67,906 shares of the company’s stock, valued at $10,633,400.54. The trade was a 3.53% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, Director James A. Beer sold 177 shares of the company’s stock in a transaction dated Wednesday, March 18th. The stock was sold at an average price of $153.53, for a total transaction of $27,174.81. Following the completion of the transaction, the director owned 4,384 shares of the company’s stock, valued at approximately $673,075.52. This trade represents a 3.88% decrease in their position. The SEC filing for this sale provides additional information. Insiders sold a total of 12,130 shares of company stock worth $1,892,487 over the last 90 days. Corporate insiders own 17.20% of the company’s stock.

Trending Headlines about Zscaler

Here are the key news stories impacting Zscaler this week:

• Positive Sentiment: Zscaler reported fiscal Q3 revenue of $850.5 million and EPS of $1.08, both above estimates, while revenue rose 25% year over year and ARR also grew 25%, reinforcing the company’s strong core demand. Article: Zscaler Announces Strong Third-Quarter Fiscal 2026 Results
• Positive Sentiment: Management raised FY26 guidance and pointed to strength in AI security and record margins, which supports the long-term growth narrative for the cybersecurity platform. Article: ZS Q3 Earnings Call Flags Prudent Growth Outlook
• Positive Sentiment: Several analysts still view the stock favorably despite trimming targets, with Rosenblatt, Bernstein, Baird, and Needham maintaining bullish or buy-equivalent ratings, suggesting Wall Street still sees upside from current levels. Article: Analyst target updates
• Neutral Sentiment: New commentary on Zscaler’s AI security strategy and product expansion adds to the growth story, but also notes the stock may still need stronger execution to justify its valuation. Article: As Zscaler Doubles Down on AI Security, ZS Stock Still Needs More to Justify Its Steep Valuation
• Negative Sentiment: Despite the beat, Zscaler’s guidance disappointed traders: the company forecast fourth-quarter revenue slightly below estimates, and Reuters said the outlook reflected intensifying competition in cybersecurity and more cautious enterprise spending. Article: Zscaler sees downbeat quarterly revenue as competition heats up in cybersecurity market
• Negative Sentiment: Some recent analyst notes turned more cautious, including a Seeking Alpha downgrade citing slowing organic growth, weaker net-new ARR momentum, and competitive pressure from integrated security platforms. Article: Zscaler Q1: I Was Right (Rating Downgrade)

Institutional Trading of Zscaler

Several large investors have recently added to or reduced their stakes in the business. Binnacle Investments Inc acquired a new position in Zscaler during the 3rd quarter worth $25,000. Root Financial Partners LLC bought a new position in shares of Zscaler in the third quarter worth $26,000. Picton Mahoney Asset Management acquired a new position in shares of Zscaler during the third quarter valued at $30,000. AlphaCentric Advisors LLC bought a new stake in shares of Zscaler during the fourth quarter valued at about $29,000. Finally, University of Texas Texas AM Investment Management Co. bought a new stake in shares of Zscaler during the fourth quarter valued at about $30,000. 46.45% of the stock is currently owned by institutional investors and hedge funds.

Zscaler Stock Down 30.2%

The firm’s fifty day moving average is $145.75 and its two-hundred day moving average is $192.65. The firm has a market cap of $20.72 billion, a price-to-earnings ratio of -308.17 and a beta of 0.96. The company has a debt-to-equity ratio of 0.78, a current ratio of 1.90 and a quick ratio of 1.90.

Zscaler (NASDAQ:ZS) last released its earnings results 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 2.25% and a positive return on equity of 0.06%. The firm had revenue of $850.48 million for the quarter, compared to analysts’ expectations of $835.60 million. During the same quarter last year, the company earned $0.84 EPS. Zscaler’s quarterly revenue was up 25.4% on a year-over-year basis. Zscaler has set its Q4 2026 guidance at 1.080-1.090 EPS and its FY 2026 guidance at 4.100-4.110 EPS. On average, sell-side analysts expect that Zscaler, Inc. will post -0.03 EPS for the current fiscal year.

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.