Zscaler (NASDAQ:ZS) Stock Price Down 2.6% – Time to Sell?

Zscaler, Inc. (NASDAQ:ZS) dropped 2.6% on Tuesday . The stock traded as low as $120.85 and last traded at $125.84. Approximately 4,752,210 shares traded hands during trading, an increase of 32% from the average daily volume of 3,598,024 shares. The stock had previously closed at $129.25.

Key Stories Impacting Zscaler

Here are the key news stories impacting Zscaler this week:

• Positive Sentiment: Several analysts reiterated bullish views on Zscaler, including Canaccord Genuity, Wedbush, Royal Bank of Canada, Guggenheim, Rosenblatt, and Needham, with price targets ranging from $180 to $220, suggesting substantial upside from current levels. Analyst rating updates via Benzinga
• Positive Sentiment: Zscaler’s Zenith Live announcements highlighted new AI-era security products, including the ZAgent Framework and expanded Zero Trust SASE capabilities, which could support future demand and product adoption. Zscaler Redefines Zero Trust SASE for the AI Era
• Positive Sentiment: Management and industry coverage emphasized strong AI and cloud security demand, and Zscaler research showed rising cybercrime sophistication, reinforcing the need for its platform. Zscaler Still Seeing Solid Demand for Cloud, AI Products, Wedbush Says
• Neutral Sentiment: Zscaler also unveiled research showing AI is changing phishing tactics, which supports the company’s security narrative but is not an immediate financial catalyst. Zscaler Research Finds Cybercrime Economics Are Shifting as AI Trades Mass Volume for Lethal Precision
• Negative Sentiment: Multiple law firms announced or expanded securities-law investigations into Zscaler, creating headline risk and likely weighing on sentiment. ZS Investors Have Opportunity to Join Zscaler, Inc. Fraud Investigation with the Schall Law Firm
• Negative Sentiment: Recent commentary highlighted that Zscaler is trading near its 52-week low, with FY27 guidance signaling slower growth, which has fueled concerns about valuation and near-term momentum. Zscaler Trades Near 52-Week Low: Time to Hold the Stock or Exit?

Analysts Set New Price Targets

ZS has been the topic of several research analyst reports. Citizens Jmp lowered their price target on Zscaler from $290.00 to $210.00 and set a “market outperform” rating on the stock in a report on Friday, May 1st. Scotiabank lowered their price target on Zscaler from $190.00 to $175.00 and set a “sector outperform” rating on the stock in a report on Wednesday, May 27th. BTIG Research reissued a “neutral” rating on shares of Zscaler in a report on Thursday, April 9th. UBS Group lowered their price target on Zscaler from $260.00 to $225.00 and set a “buy” rating on the stock in a report on Wednesday, May 27th. Finally, Robert W. Baird lowered their price target on Zscaler from $265.00 to $230.00 and set an “outperform” rating on the stock in a 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’s stock. According to data from MarketBeat, Zscaler currently has an average rating of “Moderate Buy” and an average target price of $214.33.

Zscaler Stock Up 1.1%

The company has a 50-day moving average of $142.97 and a two-hundred day moving average of $179.23. The company has a debt-to-equity ratio of 0.72, a current ratio of 1.86 and a quick ratio of 1.86. The company has a market capitalization of $20.39 billion, a PE ratio of -262.72, a P/E/G ratio of 78.68 and a beta of 0.97.

Zscaler (NASDAQ:ZS) last issued its quarterly earnings results on Tuesday, May 26th. The company reported $1.08 EPS for the quarter, topping analysts’ consensus estimates of $1.01 by $0.07. Zscaler had a negative return on equity of 0.37% and a negative net margin of 2.44%.The business had revenue of $850.48 million during the quarter, compared to analysts’ expectations of $835.14 million. During the same quarter in the prior year, the business posted $0.84 earnings per share. The business’s quarterly revenue was up 25.4% on a year-over-year basis. Zscaler has set its Q4 2026 guidance at 1.080-1.090 EPS and its FY 2026 guidance at 4.100-4.110 EPS. Sell-side analysts anticipate that Zscaler, Inc. will post 0.11 earnings per share for the current fiscal year.

Insider Buying and Selling

In other Zscaler news, insider Robert Schlossman sold 2,263 shares of Zscaler stock in a transaction that occurred on Tuesday, March 17th. The shares were sold at an average price of $156.59, for a total transaction of $354,363.17. Following the transaction, the insider owned 72,390 shares of the company’s stock, valued at $11,335,550.10. The trade was a 3.03% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. Also, EVP Raj Judge sold 2,488 shares of Zscaler stock in a transaction that occurred on Tuesday, March 17th. The shares were sold at an average price of $156.59, for a total transaction of $389,595.92. Following the transaction, the executive vice president directly owned 67,906 shares in the company, valued at $10,633,400.54. This represents a 3.53% decrease in their position. The SEC filing for this sale provides additional information. Insiders sold a total of 12,130 shares of company stock worth $1,892,487 in the last ninety days. Corporate insiders own 17.20% of the company’s stock.

Hedge Funds Weigh In On Zscaler

Several large investors have recently added to or reduced their stakes in the company. Vanguard Group Inc. increased its stake in Zscaler by 0.5% in the 4th quarter. Vanguard Group Inc. now owns 11,423,424 shares of the company’s stock worth $2,569,357,000 after buying an additional 55,521 shares in the last quarter. Groupama Asset Managment increased its stake in Zscaler by 76,352.6% in the 3rd quarter. Groupama Asset Managment now owns 4,750,000 shares of the company’s stock worth $1,423,385,000 after buying an additional 4,743,787 shares in the last quarter. First Trust Advisors LP increased its stake in Zscaler by 36.2% in the 1st quarter. First Trust Advisors LP now owns 3,518,678 shares of the company’s stock worth $493,635,000 after buying an additional 935,781 shares in the last quarter. Price T Rowe Associates Inc. MD increased its stake in Zscaler by 43.3% in the 4th quarter. Price T Rowe Associates Inc. MD now owns 2,572,358 shares of the company’s stock worth $578,576,000 after buying an additional 777,414 shares in the last quarter. Finally, State Street Corp increased its stake in Zscaler by 3.4% in the 4th quarter. State Street Corp now owns 2,337,604 shares of the company’s stock worth $525,774,000 after buying an additional 77,800 shares in the last quarter. Hedge funds and other institutional investors own 46.45% of the company’s stock.

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.