Morgan Stanley Issues Pessimistic Forecast for Zscaler (NASDAQ:ZS) Stock Price

Zscaler (NASDAQ:ZS) had its price objective lowered by research analysts at Morgan Stanley from $305.00 to $200.00 in a note issued to investors on Friday,MarketScreener reports. The brokerage presently has an “overweight” rating on the stock. Morgan Stanley’s target price would indicate a potential upside of 36.06% from the stock’s previous close.

A number of other brokerages have also issued reports on ZS. Loop Capital set a $320.00 price objective on Zscaler in a report on Thursday, December 11th. Rosenblatt Securities reaffirmed a “buy” rating and set a $280.00 target price on shares of Zscaler in a research note on Tuesday, February 24th. KeyCorp decreased their price target on Zscaler from $300.00 to $250.00 and set an “overweight” rating for the company in a research note on Tuesday, February 17th. Piper Sandler lowered their price target on Zscaler from $260.00 to $185.00 and set a “neutral” rating on the stock in a report on Friday. Finally, BTIG Research reduced their price objective on shares of Zscaler from $365.00 to $209.00 and set a “buy” rating for the company in a report on Tuesday, February 24th. One analyst has rated the stock with a Strong Buy rating, thirty-four have given a Buy rating, six have issued a Hold rating and two have issued a Sell rating to the company’s stock. According to data from MarketBeat, Zscaler presently has a consensus rating of “Moderate Buy” and a consensus price target of $274.37.

Zscaler Stock Down 12.2%

ZS stock opened at $146.99 on Friday. The stock has a market cap of $23.44 billion, a PE ratio of -349.98, a price-to-earnings-growth ratio of 299.64 and a beta of 1.02. The firm’s 50-day simple moving average is $198.92 and its 200 day simple moving average is $255.06. Zscaler has a fifty-two week low of $140.56 and a fifty-two week high of $336.99. 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 Thursday, February 26th. The company reported $1.01 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $0.89 by $0.12. Zscaler had a negative net margin of 2.25% and a positive return on equity of 0.06%. The firm had revenue of $815.75 million during the quarter, compared to analyst estimates of $798.92 million. During the same period in the previous year, the business posted $0.78 EPS. Zscaler’s revenue was up 25.9% on a year-over-year basis. Zscaler has set its Q3 2026 guidance at 1.000-1.010 EPS and its FY 2026 guidance at 3.990-4.020 EPS. As a group, sell-side analysts predict that Zscaler will post -0.1 EPS for the current year.

Insider Buying and Selling at Zscaler

In related news, insider Robert Schlossman sold 3,084 shares of Zscaler stock in a transaction dated Tuesday, December 16th. The stock was sold at an average price of $230.82, for a total transaction of $711,848.88. Following the transaction, the insider directly owned 77,002 shares of the company’s stock, valued at $17,773,601.64. The trade was a 3.85% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, EVP Raj Judge sold 3,438 shares of the business’s stock in a transaction dated Tuesday, December 16th. The stock was sold at an average price of $230.82, for a total transaction of $793,559.16. Following the completion of the sale, the executive vice president owned 70,394 shares in the company, valued at approximately $16,248,343.08. This trade represents a 4.66% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Over the last three months, insiders have sold 19,350 shares of company stock valued at $4,471,509. Corporate insiders own 17.20% of the company’s stock.

Institutional Trading of Zscaler

A number of hedge funds and other institutional investors have recently made changes to their positions in ZS. Binnacle Investments Inc acquired a new position in Zscaler in the third quarter worth approximately $25,000. Tradewinds Capital Management LLC lifted its position in shares of Zscaler by 145.7% during the 3rd quarter. Tradewinds Capital Management LLC now owns 86 shares of the company’s stock valued at $26,000 after acquiring an additional 51 shares during the last quarter. Root Financial Partners LLC bought a new stake in shares of Zscaler during the 3rd quarter worth $26,000. McIlrath & Eck LLC bought a new stake in shares of Zscaler during the 3rd quarter worth $29,000. Finally, Picton Mahoney Asset Management acquired a new position in shares of Zscaler in the 3rd quarter worth $30,000. 46.45% of the stock is currently owned by institutional investors.

Key Zscaler News

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

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.