Zscaler (NASDAQ:ZS) Shares Gap Up – What’s Next?

Zscaler, Inc. (NASDAQ:ZS) gapped up before the market opened on Tuesday. The stock had previously closed at $201.80, but opened at $210.40. Zscaler shares last traded at $207.11, with a volume of 1,693,242 shares traded.

Key Zscaler News

Here are the key news stories impacting Zscaler this week:

• Positive Sentiment: Guidance reaffirmed: Zscaler maintained its first-quarter and fiscal 2027 outlook, providing reassurance that demand and execution remain on track. The company is emphasizing its growth strategy and role as a cybersecurity platform for the AI era. Zscaler Investor Day and Guidance
• Positive Sentiment: AI-security opportunity: Management highlighted the risks posed by autonomous AI agents and Zscaler’s zero-trust approach to securing them. Investor interest in cybersecurity companies tied to AI infrastructure also lifted the broader sector, including Zscaler, CrowdStrike, and Palo Alto Networks. Cybersecurity Stocks Gain on Agentic AI Security
• Positive Sentiment: IBM and Red Hat collaboration: Zscaler is combining its Autonomous Application Shield with IBM and Red Hat technology to protect private applications during the window between vulnerability disclosure and software patching. The offering could strengthen Zscaler’s enterprise value proposition and create additional commercial opportunities. Zscaler IBM and Red Hat Collaboration
• Neutral Sentiment: Analysts described expectations for Investor Day as muted, while the reported consensus price target of approximately $219.78 suggests moderate potential upside but also indicates that much of the near-term optimism may already be reflected in the stock.

Wall Street Analyst Weigh In

A number of analysts recently commented on ZS shares. Weiss Ratings raised shares of Zscaler from a “sell (e+)” rating to a “sell (d-)” rating in a report on Thursday, September 24th. Barclays upped their price target on Zscaler from $200.00 to $220.00 and gave the stock an “overweight” rating in a report on Tuesday, September 29th. Citigroup raised their price objective on Zscaler from $175.00 to $205.00 and gave the company a “buy” rating in a research note on Tuesday, September 8th. Mizuho boosted their target price on Zscaler from $210.00 to $220.00 and gave the stock an “outperform” rating in a research report on Friday, September 25th. Finally, Stephens set a $215.00 price target on Zscaler in a research report on Friday, September 4th. Thirty-four research analysts have rated the stock with a Buy rating, seven have issued a Hold rating and one has issued a Sell rating to the stock. According to data from MarketBeat.com, the company presently has a consensus rating of “Moderate Buy” and an average price target of $220.78.

Zscaler Stock Performance

The company has a market capitalization of $33.92 billion, a PE ratio of -533.30, a price-to-earnings-growth ratio of 20.49 and a beta of 0.94. The stock’s fifty day simple moving average is $180.73 and its 200-day simple moving average is $155.42. The company has a debt-to-equity ratio of 0.65, a quick ratio of 1.70 and a current ratio of 1.70.

Zscaler (NASDAQ:ZS) last announced its quarterly earnings data on Thursday, September 3rd. The company reported $1.19 earnings per share (EPS) for the quarter, beating the consensus estimate of $1.09 by $0.10. The business had revenue of $898.19 million for the quarter, compared to the consensus estimate of $876.96 million. Zscaler had a negative net margin of 1.88% and a positive return on equity of 1.23%. The company’s quarterly revenue was up 24.9% compared to the same quarter last year. During the same quarter in the prior year, the firm posted $0.89 earnings per share. Zscaler has set its FY 2027 guidance at 4.860-4.900 EPS and its Q1 2027 guidance at 1.150-1.160 EPS. As a group, equities analysts predict that Zscaler, Inc. will post 0.7 earnings per share for the current year.

Insiders Place Their Bets

In related news, insider Robert Schlossman sold 5,394 shares of the company’s stock in a transaction on Monday, September 21st. The stock was sold at an average price of $200.00, for a total value of $1,078,800.00. Following the completion of the transaction, the insider directly owned 61,525 shares in the company, valued at approximately $12,305,000. This represents a 8.06% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Jagtar Chaudhry sold 2,852 shares of the stock in a transaction dated Wednesday, September 16th. The stock was sold at an average price of $192.76, for a total value of $549,751.52. Following the transaction, the chief executive officer owned 340,186 shares in the company, valued at $65,574,253.36. This trade represents a 0.83% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Over the last 90 days, insiders have sold 29,053 shares of company stock valued at $5,610,165. 17.20% of the stock is currently owned by company insiders.

Institutional Investors Weigh In On Zscaler

Several hedge funds have recently modified their holdings of the stock. CX Institutional grew its stake in shares of Zscaler by 15.9% during the 3rd quarter. CX Institutional now owns 611 shares of the company’s stock valued at $122,000 after buying an additional 84 shares during the period. Versant Capital Management Inc raised its position in shares of Zscaler by 45.6% in the 3rd quarter. Versant Capital Management Inc now owns 230 shares of the company’s stock worth $46,000 after buying an additional 72 shares during the period. Burkett Financial Services LLC acquired a new position in Zscaler in the third quarter valued at $27,000. WINTON GROUP Ltd grew its position in Zscaler by 56.5% during the second quarter. WINTON GROUP Ltd now owns 4,890 shares of the company’s stock valued at $690,000 after acquiring an additional 1,765 shares during the period. Finally, NewEdge Advisors LLC grew its position in Zscaler by 7.8% during the second quarter. NewEdge Advisors LLC now owns 4,626 shares of the company’s stock valued at $653,000 after acquiring an additional 336 shares during the period. 46.45% of the stock is owned by institutional investors and hedge funds.

About Zscaler

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

The company’s offerings include Zscaler Internet Access, which helps secure internet and software-as-a-service access, and Zscaler Private Access, which provides controlled access to private applications without extending an organization’s network to remote users.