Zscaler (NASDAQ:ZS) Issues Quarterly Earnings Results, Beats Expectations By $0.12 EPS

Zscaler (NASDAQ:ZS) posted its earnings results on Thursday. The company reported $1.01 EPS for the quarter, topping analysts’ consensus estimates of $0.89 by $0.12, FiscalAI reports. Zscaler had a negative net margin of 1.45% and a negative return on equity of 0.12%. The business had revenue of $815.75 million during the quarter, compared to the consensus estimate of $798.92 million.

Zscaler Stock Up 7.5%

NASDAQ ZS traded up $11.66 during midday trading on Thursday, hitting $167.36. 6,036,552 shares of the company traded hands, compared to its average volume of 2,475,668. The company’s 50-day simple moving average is $201.91 and its 200-day simple moving average is $256.68. The company has a debt-to-equity ratio of 0.86, a current ratio of 1.82 and a quick ratio of 1.82. Zscaler has a 52 week low of $141.56 and a 52 week high of $336.99. The company has a market cap of $26.69 billion, a PE ratio of -643.67, a price-to-earnings-growth ratio of 304.47 and a beta of 1.02.

Insider Activity

In related news, EVP Raj Judge sold 3,438 shares of the firm’s stock in a transaction on Tuesday, December 16th. The shares were sold at an average price of $230.82, for a total transaction of $793,559.16. Following the completion of the transaction, the executive vice president owned 70,394 shares of the company’s stock, valued at $16,248,343.08. This trade represents a 4.66% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, insider Adam Geller sold 1,620 shares of the business’s stock in a transaction on Wednesday, December 17th. The shares were sold at an average price of $232.79, for a total transaction of $377,119.80. Following the completion of the transaction, the insider owned 50,528 shares of the company’s stock, valued at approximately $11,762,413.12. This represents a 3.11% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Over the last three months, insiders have sold 19,350 shares of company stock valued at $4,471,509. 17.20% of the stock is owned by insiders.

Institutional Trading of Zscaler

A number of institutional investors and hedge funds have recently added to or reduced their stakes in ZS. Binnacle Investments Inc acquired a new position in shares of Zscaler during the third quarter worth about $25,000. AlphaCentric Advisors LLC acquired a new stake in shares of Zscaler in the fourth quarter worth $29,000. Mcguire Capital Advisors Inc. acquired a new position in shares of Zscaler in the 4th quarter valued at approximately $32,000. Strive Financial Group LLC acquired a new stake in shares of Zscaler during the 4th quarter valued at approximately $39,000. Finally, Sumitomo Mitsui Financial Group Inc. boosted its holdings in shares of Zscaler by 105.5% in the 4th quarter. Sumitomo Mitsui Financial Group Inc. now owns 215 shares of the company’s stock valued at $49,000 after buying an additional 4,111 shares during the period. Hedge funds and other institutional investors own 46.45% of the company’s stock.

Analyst Upgrades and Downgrades

ZS has been the topic of a number of recent analyst reports. Royal Bank Of Canada restated an “outperform” rating and set a $250.00 target price on shares of Zscaler in a research note on Wednesday, February 11th. Macquarie Infrastructure assumed coverage on Zscaler in a research note on Friday, October 31st. They issued an “outperform” rating and a $390.00 price objective for the company. Berenberg Bank dropped their price target on Zscaler from $400.00 to $390.00 and set a “buy” rating for the company in a research note on Friday, November 28th. Stifel Nicolaus cut their target price on shares of Zscaler from $330.00 to $320.00 and set a “buy” rating for the company in a research note on Wednesday, November 26th. Finally, Cantor Fitzgerald reduced their target price on Zscaler from $365.00 to $300.00 and set an “overweight” rating on the stock in a report on Tuesday. One research analyst has rated the stock with a Strong Buy rating, thirty-four have issued a Buy rating, seven have given a Hold rating and one has issued a Sell rating to the company. According to data from MarketBeat.com, Zscaler currently has an average rating of “Moderate Buy” and a consensus price target of $293.84.

Key Headlines Impacting Zscaler

Here are the key news stories impacting Zscaler this week:

• Positive Sentiment: Q2 results topped expectations and management raised ARR guidance to 24% — Revenue $815.8M vs. ~$799M est; adjusted EPS $1.01 vs. $0.89 est. Management raised FY26 ARR growth target to 24%, a clear positive signal for recurring revenue momentum. Press Release
• Positive Sentiment: ARR and cash-flow expansion: ARR +25% YoY to $3.359B; operating cash flow +14% to $204.1M; free cash flow +18% to $169.1M — these improve the quality of revenue and support valuation arguments for subscription growth. Quarter Summary
• Positive Sentiment: AI security momentum: company’s AI Security offering reportedly reached ~$400M ARR by Q1 2026, providing a fast?growing monetization avenue beyond traditional seat?based SaaS. This supports long?term growth upside if adoption continues. SA Analysis
• Neutral Sentiment: GAAP profitability remains negative: the company reported a GAAP loss of $34.3M (?$0.21/sh) and negative net margin/ROE metrics, meaning adjusted results rely on exclusion of stock comp and one?offs — a mixed read for fundamental investors. Earnings Snapshot
• Neutral Sentiment: Pre?earnings analyst upgrades and revisions anticipated a stronger quarter, which may have amplified the post?earnings move; several analysts updated models ahead of the call. Benzinga Preview
• Negative Sentiment: Analyst skepticism remains: TD Cowen and BTIG published pessimistic forecasts, and some sell?side commentary highlights valuation and competitive pressure as downside risks — these dissenting views can cap upside. TD Cowen Note BTIG Note
• Negative Sentiment: Competitive and valuation concerns highlighted in market coverage may keep volatility high; Investing.com notes competition and stretched multiples remain a test for the stock. Investing.com
• Negative Sentiment: Recent analyst downgrades earlier this week contributed to intraday weakness before the print, showing sensitivity to sell?side views despite underlying ARR growth. Downgrade Coverage

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.