Zscaler (NASDAQ:ZS) Shares Gap Up Following Analyst Upgrade

Zscaler, Inc. (NASDAQ:ZS) gapped up before the market opened on Thursday after JPMorgan Chase & Co. raised their price target on the stock from $205.00 to $215.00. The stock had previously closed at $170.31, but opened at $179.12. JPMorgan Chase & Co. currently has an overweight rating on the stock. Zscaler shares last traded at $188.7810, with a volume of 596,879 shares.

Several other equities analysts have also weighed in on the stock. Rosenblatt Securities reiterated a “buy” rating and set a $200.00 price objective on shares of Zscaler in a report on Wednesday, June 10th. The Goldman Sachs Group reiterated a “neutral” rating and issued a $179.00 price target on shares of Zscaler in a report on Wednesday, May 27th. Sanford C. Bernstein reduced their price objective on Zscaler from $228.00 to $224.00 and set an “outperform” rating for the company in a research note on Wednesday, May 27th. Barclays boosted their price objective on Zscaler from $170.00 to $192.00 and gave the company an “overweight” rating in a report on Tuesday. Finally, Robert W. Baird lowered their target price on Zscaler from $265.00 to $230.00 and set an “outperform” rating on the stock in a research report on Wednesday, May 27th. Thirty-four equities research analysts have rated the stock with a Buy rating, six have given a Hold rating and one has given a Sell rating to the company. According to MarketBeat.com, the company has a consensus rating of “Moderate Buy” and a consensus price target of $216.18.

Insider Buying and Selling

In other news, insider Robert Schlossman sold 3,146 shares of the business’s stock in a transaction that occurred on Tuesday, June 16th. The stock was sold at an average price of $126.43, for a total value of $397,748.78. Following the transaction, the insider owned 69,366 shares in the company, valued at $8,769,943.38. The trade was a 4.34% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CFO Kevin Rubin sold 3,000 shares of the business’s stock in a transaction dated Thursday, June 25th. The stock was sold at an average price of $124.22, for a total transaction of $372,660.00. Following the completion of the transaction, the chief financial officer directly owned 41,901 shares in the company, valued at $5,204,942.22. This trade represents a 6.68% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold 16,772 shares of company stock worth $2,139,799 over the last three months. Company insiders own 17.20% of the company’s stock.

Zscaler News Roundup

Here are the key news stories impacting Zscaler this week:

• Positive Sentiment: JPMorgan raised its price target for Zscaler (ZS) from $205 to $215 and maintained an “overweight” rating. The new target implies substantial upside from recent trading levels and signals confidence in Zscaler’s growth outlook. JPMorgan raises Zscaler price target
• Positive Sentiment: Guggenheim reaffirmed its “buy” rating, adding to the generally favorable analyst coverage ahead of earnings. MarketBeat reports a consensus “moderate buy” rating and an average price target of $216.18. Guggenheim reaffirms buy rating
• Positive Sentiment: Zscaler participated in Deep Cogito’s $43 million Series A financing. The investment gives Zscaler exposure to a company developing self-improving artificial intelligence models and may complement its enterprise AI strategy, although it is unlikely to materially affect near-term earnings. Deep Cogito raises Series A
• Neutral Sentiment: Zscaler is expected to report quarterly results Thursday, making the earnings release the main near-term catalyst. Its prior quarter exceeded expectations, with revenue of $850.48 million, up 25.4% year over year, and adjusted earnings of $1.08 per share versus the $1.01 consensus. Zscaler expected to report earnings
• Neutral Sentiment: ZS recently rose while the broader market declined, indicating relative strength; however, investors are likely waiting for management’s guidance on growth, profitability and demand before assigning the stock a new valuation. Zscaler market performance analysis
• Negative Sentiment: Evercore added Zscaler to its tactical “underperform” list ahead of the earnings report, warning that expectations for cybersecurity and AI-related growth may be too high. This creates downside risk if results or guidance disappoint. Evercore adds Zscaler to underperform list
• Negative Sentiment: CFO Kevin Rubin sold 503 shares worth approximately $87,210 under a pre-arranged Rule 10b5-1 plan. The sale reduced his holdings by about 1.2% and is relatively small, making it a modest sentiment concern rather than a major fundamental signal. Zscaler CFO stock sale

Institutional Inflows and Outflows

Several large investors have recently added to or reduced their stakes in ZS. Handelsbanken Fonder AB grew its position in shares of Zscaler by 89.6% in the 2nd quarter. Handelsbanken Fonder AB now owns 60,933 shares of the company’s stock worth $8,601,000 after buying an additional 28,792 shares during the last quarter. Assenagon Asset Management S.A. lifted its position in shares of Zscaler by 6.6% in the 2nd quarter. Assenagon Asset Management S.A. now owns 193,297 shares of the company’s stock worth $27,284,000 after purchasing an additional 11,941 shares during the period. Oxbow Advisors LLC purchased a new stake in shares of Zscaler in the 4th quarter worth about $2,939,000. Qsemble Capital Management LP lifted its position in shares of Zscaler by 105.5% in the 4th quarter. Qsemble Capital Management LP now owns 15,773 shares of the company’s stock worth $3,548,000 after purchasing an additional 8,099 shares during the period. Finally, Bank of America Corp DE boosted its stake in shares of Zscaler by 44.3% during the 1st quarter. Bank of America Corp DE now owns 779,245 shares of the company’s stock valued at $109,320,000 after purchasing an additional 239,326 shares in the last quarter. Institutional investors own 46.45% of the company’s stock.

Zscaler Price Performance

The company has a current ratio of 1.86, a quick ratio of 1.86 and a debt-to-equity ratio of 0.72. The business’s 50 day moving average price is $153.75 and its two-hundred day moving average price is $149.99. The stock has a market cap of $30.60 billion, a P/E ratio of -393.98, a price-to-earnings-growth ratio of 99.13 and a beta of 0.94.

Zscaler (NASDAQ:ZS) last released its quarterly earnings results on Tuesday, May 26th. The company reported $1.08 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $1.01 by $0.07. The company had revenue of $850.48 million during the quarter, compared to the consensus estimate of $835.14 million. Zscaler had a negative net margin of 2.44% and a negative return on equity of 0.37%. Zscaler’s revenue was up 25.4% on a year-over-year basis. During the same period in the prior year, the firm earned $0.84 earnings per share. As a group, sell-side analysts expect that Zscaler, Inc. will post 0.13 earnings per share for the current fiscal year.

Zscaler Company Profile

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.