Zscaler (NASDAQ:ZS) Shares Down 8.6% on Analyst Downgrade

Zscaler, Inc. (NASDAQ:ZS) traded down 8.6% during mid-day trading on Monday after Robert W. Baird lowered their price target on the stock from $360.00 to $300.00. Robert W. Baird currently has an outperform rating on the stock. Zscaler traded as low as $147.41 and last traded at $146.0770. 1,159,277 shares traded hands during mid-day trading, a decline of 46% from the average session volume of 2,149,925 shares. The stock had previously closed at $159.75.

Several other research firms have also recently weighed in on ZS. Loop Capital set a $320.00 price target on Zscaler in a report on Thursday, December 11th. Macquarie Infrastructure started coverage on shares of Zscaler in a research report on Friday, October 31st. They issued an “outperform” rating and a $390.00 price objective on the stock. Cantor Fitzgerald reiterated an “overweight” rating on shares of Zscaler in a research report on Monday, February 9th. Bank of America cut their price target on shares of Zscaler from $355.00 to $335.00 and set a “buy” rating for the company in a research note on Wednesday, November 26th. Finally, HC Wainwright reissued a “buy” rating on shares of Zscaler in a report on Wednesday, November 26th. One investment analyst has rated the stock with a Strong Buy rating, thirty-three have assigned a Buy rating, seven have given a Hold rating and one has given a Sell rating to the company. According to MarketBeat.com, Zscaler has a consensus rating of “Moderate Buy” and a consensus price target of $302.35.

Insider Buying and Selling at Zscaler

In related news, insider Robert Schlossman sold 2,349 shares of the business’s stock in a transaction that occurred on Wednesday, December 17th. The stock was sold at an average price of $232.79, for a total value of $546,823.71. Following the transaction, the insider directly owned 74,653 shares of the company’s stock, valued at approximately $17,378,471.87. The trade was a 3.05% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. Also, insider Adam Geller sold 1,620 shares of the company’s stock in a transaction that occurred on Wednesday, December 17th. The stock was sold at an average price of $232.79, for a total value of $377,119.80. Following the completion of the transaction, the insider owned 50,528 shares of the company’s stock, valued at $11,762,413.12. The trade was a 3.11% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Over the last quarter, insiders sold 19,350 shares of company stock valued at $4,471,509. 17.20% of the stock is currently owned by corporate insiders.

Key Zscaler News

Here are the key news stories impacting Zscaler this week:

• Positive Sentiment: Zscaler broadened its footprint in India by partnering with Bharti Airtel to launch an AI & Cyber Threat Research Center — a strategic move to deepen AI security credentials and expand market access in a high‑growth region. Read More.
• Positive Sentiment: Underlying fundamentals remain supportive: Zscaler recently beat revenue/earnings expectations, is growing revenue >20% year‑over‑year and has multi‑quarter AI/security demand highlighted ahead of Q2 results — factors that investors will weigh as a counterbalance to short‑term volatility. Read More.
• Neutral Sentiment: Mizuho trimmed its price target (reiterated Outperform) citing sector multiple compression; the bank’s view keeps long‑term thesis intact but signals lower near‑term valuation expectations. Read More.
• Neutral Sentiment: Robert W. Baird reduced its target from $360 to $300 while maintaining an Outperform rating — another sign analysts are lowering targets but not abandoning the growth story. Read More.
• Negative Sentiment: Sector sell‑off driven by Anthropic’s new AI security tool: investors fear AI that scans code for vulnerabilities could displace some incumbents’ functionality or compress future software pricing — a headline that hit CrowdStrike, Zscaler and other security stocks hard. Read More. Read More.
• Negative Sentiment: White House plans to raise global tariffs to 15% added macro downside, cited as a direct, short‑term headwind for Zscaler in market reports. Read More.
• Negative Sentiment: Additional analyst cuts and a downgrade pushed the stock to fresh lows (including a recent 52‑week low), amplifying selling pressure as target trims reduced near‑term upside. Read More.

Institutional Trading of Zscaler

Large investors have recently added to or reduced their stakes in the company. Bessemer Group Inc. grew its position in Zscaler by 3.2% during the third quarter. Bessemer Group Inc. now owns 1,021 shares of the company’s stock worth $306,000 after buying an additional 32 shares during the period. Cox Capital Mgt LLC boosted its stake in shares of Zscaler by 0.6% during the 3rd 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 in the last quarter. Brookstone Capital Management boosted its stake in shares of Zscaler by 3.7% during the 3rd quarter. Brookstone Capital Management now owns 936 shares of the company’s stock worth $280,000 after acquiring an additional 33 shares in the last quarter. Wedbush Securities Inc. grew its holdings in shares of Zscaler by 0.7% in the 3rd quarter. Wedbush Securities Inc. now owns 5,129 shares of the company’s stock worth $1,537,000 after acquiring an additional 34 shares during the period. Finally, Goldstream Capital Management Ltd increased 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 valued at $3,731,000 after purchasing an additional 34 shares in the last quarter. Institutional investors own 46.45% of the company’s stock.

Zscaler Stock Performance

The firm has a fifty day moving average of $204.99 and a 200-day moving average of $258.24. The stock has a market capitalization of $22.85 billion, a price-to-earnings ratio of -551.06, a PEG ratio of 325.66 and a beta of 1.02. The company has a quick ratio of 1.82, a current ratio of 1.82 and a debt-to-equity ratio of 0.86.

Zscaler (NASDAQ:ZS) last posted its earnings results on Tuesday, November 25th. The company reported $0.96 earnings per share for the quarter, beating the consensus estimate of $0.85 by $0.11. The company had revenue of $788.11 million for the quarter, compared to analyst estimates of $773.86 million. Zscaler had a negative return on equity of 0.12% and a negative net margin of 1.45%.Zscaler’s revenue was up 25.5% compared to the same quarter last year. During the same quarter in the prior year, the company earned $0.77 earnings per share. As a group, sell-side analysts anticipate that Zscaler, Inc. will post -0.1 EPS for the current year.

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.