Zscaler (NASDAQ:ZS) Cut to “Strong Sell” at Zacks Research

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

ZS has been the subject of several other research reports. Weiss Ratings reissued a “sell (d-)” rating on shares of Zscaler in a research note on Wednesday, January 21st. Needham & Company LLC cut their target price on Zscaler from $310.00 to $180.00 and set a “buy” rating for the company in a research note on Friday, February 27th. Citizens Jmp cut their target price on Zscaler from $355.00 to $290.00 and set a “market outperform” rating for the company in a research note on Friday, February 27th. Wells Fargo & Company started coverage on Zscaler in a research note on Tuesday, March 3rd. They issued an “overweight” rating and a $200.00 price objective for the company. Finally, Truist Financial dropped their price objective on Zscaler from $350.00 to $250.00 and set a “buy” rating for the company in a research note on Tuesday, February 17th. Two investment analysts have rated the stock with a Strong Buy rating, twenty-nine have given a Buy rating, eight have issued a Hold rating and two have issued a Sell rating to the company. Based on data from MarketBeat, the company has a consensus rating of “Moderate Buy” and a consensus target price of $265.74.

Zscaler Price Performance

ZS stock opened at $130.68 on Wednesday. The business has a fifty day moving average of $143.64 and a two-hundred day moving average of $211.56. The company has a quick ratio of 1.90, a current ratio of 1.90 and a debt-to-equity ratio of 0.78. The stock has a market cap of $21.01 billion, a price-to-earnings ratio of -311.14 and a beta of 1.12. Zscaler has a 52-week low of $114.63 and a 52-week high of $336.99.

Zscaler (NASDAQ:ZS) last posted its earnings results on Thursday, February 26th. The company reported $1.01 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.89 by $0.12. The company had revenue of $815.75 million during 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 firm’s quarterly revenue was up 25.9% compared to the same quarter last year. During the same quarter last year, the firm earned $0.78 earnings per share. Zscaler has set its Q3 2026 guidance at 1.000-1.010 EPS and its FY 2026 guidance at 3.990-4.020 EPS. As a group, research analysts anticipate that Zscaler will post -0.03 earnings per share for the current year.

Insider Transactions at Zscaler

In related news, CEO Jagtar Singh Chaudhry sold 1,941 shares of Zscaler stock in a transaction on Tuesday, March 17th. The stock was sold at an average price of $156.59, for a total value of $303,941.19. Following the completion of the transaction, the chief executive officer directly owned 345,916 shares in the company, valued at approximately $54,166,986.44. This trade represents a 0.56% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is accessible through this hyperlink. Also, CFO Kevin Rubin sold 1,682 shares of Zscaler stock in a transaction on Tuesday, March 17th. The shares were sold at an average price of $156.59, for a total value of $263,384.38. Following the completion of the transaction, the chief financial officer owned 46,479 shares of the company’s stock, valued at approximately $7,278,146.61. This trade represents a 3.49% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders sold a total of 12,130 shares of company stock valued at $1,892,487 in the last 90 days. Insiders own 17.20% of the company’s stock.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently bought and sold shares of the stock. Sequoia Financial Advisors LLC boosted its holdings in Zscaler by 1.4% in the first quarter. Sequoia Financial Advisors LLC now owns 61,315 shares of the company’s stock valued at $8,602,000 after purchasing an additional 835 shares during the period. Kornitzer Capital Management Inc. KS boosted its holdings in Zscaler by 4.7% in the first quarter. Kornitzer Capital Management Inc. KS now owns 22,700 shares of the company’s stock valued at $3,185,000 after purchasing an additional 1,025 shares during the period. Kestra Advisory Services LLC boosted its holdings in Zscaler by 22.8% in the first quarter. Kestra Advisory Services LLC now owns 16,663 shares of the company’s stock valued at $2,338,000 after purchasing an additional 3,093 shares during the period. Resona Asset Management Co. Ltd. boosted its holdings in Zscaler by 4.0% in the first quarter. Resona Asset Management Co. Ltd. now owns 32,700 shares of the company’s stock valued at $4,569,000 after purchasing an additional 1,266 shares during the period. Finally, Clare Market Investments LLC purchased a new position in Zscaler in the first quarter valued at $4,298,000. 46.45% of the stock is currently owned by hedge funds and other institutional investors.

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.