Zscaler (NASDAQ:ZS) Downgraded by Zacks Research to “Strong Sell”

Zacks Research lowered shares of Zscaler (NASDAQ:ZS) from a hold rating to a strong sell rating in a research report sent to investors on Thursday,Zacks.com reports.

Other equities research analysts have also issued reports about the stock. Capital One Financial set a $320.00 price objective on shares of Zscaler and gave the company an “overweight” rating in a report on Wednesday, November 26th. BTIG Research lowered their price target on Zscaler from $365.00 to $209.00 and set a “buy” rating for the company in a research report on Tuesday. Wedbush increased their price objective on Zscaler from $330.00 to $350.00 and gave the company an “outperform” rating in a report on Monday, November 10th. Bank of America decreased their target price on Zscaler from $355.00 to $335.00 and set a “buy” rating for the company in a report on Wednesday, November 26th. Finally, Weiss Ratings reiterated a “sell (d-)” rating on shares of Zscaler in a report on Wednesday, January 21st. One investment analyst has rated the stock with a Strong Buy rating, thirty-four have given a Buy rating, six have assigned a Hold rating and two have assigned a Sell rating to the company’s stock. Based on data from MarketBeat.com, the stock currently has an average rating of “Moderate Buy” and a consensus target price of $274.37.

Zscaler Stock Down 12.2%

NASDAQ ZS traded down $20.37 during trading on Thursday, hitting $146.99. The company’s stock had a trading volume of 11,080,725 shares, compared to its average volume of 3,018,555. Zscaler has a fifty-two week low of $140.56 and a fifty-two week high of $336.99. The company has a market cap of $23.44 billion, a PE ratio of -349.98, a P/E/G ratio of 341.17 and a beta of 1.02. The company has a debt-to-equity ratio of 0.86, a current ratio of 1.82 and a quick ratio of 1.82. The business’s 50 day simple moving average is $198.92 and its 200-day simple moving average is $255.20.

Zscaler (NASDAQ:ZS) last announced its quarterly earnings data on Thursday, February 26th. The company reported $1.01 EPS for the quarter, beating the consensus estimate of $0.89 by $0.12. The firm had revenue of $815.75 million during the quarter, compared to analyst estimates of $798.92 million. Zscaler had a negative net margin of 2.25% and a positive return on equity of 0.06%. Zscaler’s revenue was up 25.9% on a year-over-year basis. During the same period last year, the firm posted $0.78 EPS. Zscaler has set its Q3 2026 guidance at 1.000-1.010 EPS and its FY 2026 guidance at 3.990-4.020 EPS. On average, equities analysts anticipate that Zscaler will post -0.1 EPS for the current fiscal year.

Insider Buying and Selling

In other Zscaler news, CFO Kevin Rubin sold 3,303 shares of the stock in a transaction that occurred on Tuesday, December 16th. The stock was sold at an average price of $230.82, for a total transaction of $762,398.46. Following the transaction, the chief financial officer owned 48,161 shares in the company, valued at approximately $11,116,522.02. This represents a 6.42% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. Also, EVP Raj Judge sold 3,438 shares of the firm’s stock in a transaction that occurred on Tuesday, December 16th. The shares were sold at an average price of $230.82, for a total value of $793,559.16. Following the completion of the sale, the executive vice president directly owned 70,394 shares in the company, valued at approximately $16,248,343.08. The trade was a 4.66% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders have sold 19,350 shares of company stock valued at $4,471,509 in the last ninety days. Company insiders own 17.20% of the company’s stock.

Institutional Trading of Zscaler

Large investors have recently made changes to their positions in the company. Bessemer Group Inc. boosted its stake in Zscaler by 3.2% during the 3rd quarter. Bessemer Group Inc. now owns 1,021 shares of the company’s stock worth $306,000 after purchasing an additional 32 shares during the last quarter. Cox Capital Mgt LLC boosted its position in Zscaler by 0.6% during the third quarter. Cox Capital Mgt LLC now owns 5,576 shares of the company’s stock worth $1,671,000 after acquiring an additional 33 shares during the last quarter. Brookstone Capital Management raised its holdings in Zscaler by 3.7% in the 3rd quarter. Brookstone Capital Management now owns 936 shares of the company’s stock valued at $280,000 after acquiring an additional 33 shares during the last quarter. Wedbush Securities Inc. raised its holdings in Zscaler by 0.7% in the 3rd quarter. Wedbush Securities Inc. now owns 5,129 shares of the company’s stock valued at $1,537,000 after acquiring an additional 34 shares during the last quarter. Finally, Goldstream Capital Management Ltd lifted its stake in Zscaler by 0.3% in the 3rd quarter. Goldstream Capital Management Ltd now owns 12,450 shares of the company’s stock worth $3,731,000 after purchasing an additional 34 shares in the last quarter. 46.45% of the stock is currently owned by hedge funds and other institutional investors.

Zscaler News Summary

Here are the key news stories impacting Zscaler this week:

• Positive Sentiment: Q2 results beat: adjusted EPS $1.01 vs. $0.89 est., revenue $815.8M vs. ~$799M est., and ARR grew ~25% year/year — signals demand momentum. GlobeNewswire: Q2 Results
• Positive Sentiment: Management is pitching AI security growth and new initiatives (AI Guard, agentic security, India AI/Cyber center with Airtel) as durable secular drivers that expand TAM beyond seat-based SaaS. CFO Interview Airtel AI Center
• Neutral Sentiment: Management issued updated forward guidance and commentary (Q3 EPS range and FY EPS range were provided), creating mixed signals that markets are parsing. Earnings Highlights
• Neutral Sentiment: Executives (CEO & CFO) gave interviews and the full call transcript is available — useful for investors wanting detail on churn, acquisitions and how AI monetization will scale. Earnings Call Transcript
• Negative Sentiment: Wider GAAP loss and higher spending: the company posted a larger net loss driven by increased sales, marketing and R&D, which pressured investor sentiment. Reuters: Wider Loss
• Negative Sentiment: Mixed/uncertain revenue outlook commentary: some outlets reported the company lowered aspects of its revenue outlook, creating confusion and weighing on the stock despite EPS beats. Benzinga: Revenue Guidance Report
• Negative Sentiment: Broad analyst price‑target cuts today from multiple firms (Canaccord, Morgan Stanley, Oppenheimer, Berenberg, Needham, and others) have amplified selling pressure even as many kept “buy/outperform” stances — the cuts compress perception of near‑term upside. MarketScreener: Analyst Cuts
• Negative Sentiment: Market reaction: investors appear to be focusing on margin/expense trajectory, competitive pressure and near-term revenue clarity rather than the company’s AI growth story — producing the stock decline. Seeking Alpha: Market Reaction

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.