Zscaler (NASDAQ:ZS) Shares Gap Up – Time to Buy?

Zscaler, Inc. (NASDAQ:ZS)’s stock price 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.

Zscaler News Summary

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 Analysts Forecast Growth

Several equities research analysts have recently issued reports on ZS shares. Needham & Company LLC increased their price objective on shares of Zscaler from $180.00 to $215.00 and gave the stock a “buy” rating in a research report on Friday, September 4th. Piper Sandler upped their price target on shares of Zscaler from $160.00 to $175.00 and gave the stock a “neutral” rating in a research report on Friday, September 4th. Barclays increased their price target on Zscaler from $200.00 to $220.00 and gave the company an “overweight” rating in a report on Tuesday, September 29th. Stifel Nicolaus boosted their price objective on Zscaler from $175.00 to $200.00 and gave the stock a “buy” rating in a research note on Wednesday, August 19th. Finally, Wolfe Research reiterated an “outperform” rating and issued a $150.00 target price on shares of Zscaler in a research note on Thursday, June 11th. Thirty-four research analysts have rated the stock with a Buy rating, seven have issued a Hold rating and one has assigned a Sell rating to the stock. According to MarketBeat, Zscaler has a consensus rating of “Moderate Buy” and a consensus price target of $220.78.

Zscaler Stock Performance

The company has a debt-to-equity ratio of 0.65, a current ratio of 1.70 and a quick ratio of 1.70. The stock has a 50-day moving average price of $180.73 and a 200-day moving average price of $155.42. The firm 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.

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

Insiders Place Their Bets

In other Zscaler news, insider Robert Schlossman sold 5,394 shares of the stock in a transaction on Monday, September 21st. The shares were sold at an average price of $200.00, for a total transaction of $1,078,800.00. Following the transaction, the insider directly owned 61,525 shares in the company, valued at $12,305,000. This represents a 8.06% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Adam Geller sold 661 shares of the firm’s stock in a transaction on Monday, September 21st. The stock was sold at an average price of $200.00, for a total transaction of $132,200.00. Following the transaction, the insider directly owned 38,308 shares of the company’s stock, valued at approximately $7,661,600. This represents a 1.70% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last quarter, insiders have sold 29,053 shares of company stock valued at $5,610,165. 17.20% of the stock is owned by insiders.

Hedge Funds Weigh In On Zscaler

A number of hedge funds have recently bought and sold shares of the company. Burkett Financial Services LLC bought a new position in Zscaler during the 3rd quarter worth approximately $27,000. University of Texas Texas AM Investment Management Co. bought a new stake in shares of Zscaler in the 4th quarter valued at approximately $30,000. POM Investment Strategies LLC raised its position in shares of Zscaler by 92.9% during the 2nd quarter. POM Investment Strategies LLC now owns 218 shares of the company’s stock valued at $31,000 after acquiring an additional 105 shares in the last quarter. Western Wealth Management LLC acquired a new stake in shares of Zscaler during the 1st quarter valued at approximately $33,000. Finally, Reflection Asset Management bought a new position in Zscaler during the fourth quarter worth $40,000. 46.45% of the stock is currently 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.