Zscaler (NASDAQ:ZS) Trading Down 4.1% – Should You Sell?

Shares of Zscaler, Inc. (NASDAQ:ZS) dropped 4.1% during mid-day trading on Tuesday . The company traded as low as $169.71 and last traded at $168.7710. Approximately 711,371 shares changed hands during trading, a decline of 79% from the average session volume of 3,339,190 shares. The stock had previously closed at $176.06.

Key Headlines Impacting Zscaler

Here are the key news stories impacting Zscaler this week:

• Positive Sentiment: JPMorgan raised its price target on Zscaler (ZS) from $205 to $215 and maintained an “overweight” rating, signaling confidence in the company’s growth outlook and providing a favorable catalyst for the stock. JPMorgan raises Zscaler price target
• Positive Sentiment: Guggenheim reaffirmed its “buy” rating on Zscaler, adding to the constructive analyst sentiment surrounding the cybersecurity software provider ahead of earnings. Guggenheim reaffirms buy rating
• Positive Sentiment: Zscaler participated in Deep Cogito’s $43 million Series A financing. The investment gives Zscaler exposure to a startup developing self-improving AI models and may support its broader positioning in enterprise artificial intelligence, although the deal is unlikely to materially affect near-term financial results. Deep Cogito raises Series A
• Neutral Sentiment: Recent coverage noted that ZS outperformed the broader market during the latest session, while its previous quarter included an earnings and revenue beat. Investors are now focused on whether that momentum continued into the upcoming report. Zscaler market performance analysis
• Negative Sentiment: Evercore added Zscaler to its tactical “underperform” list ahead of the results, highlighting downside risk if expectations for cybersecurity and AI-driven growth prove too aggressive. Analyst opinions on ZS remain mixed. Evercore adds Zscaler to underperform list
• Negative Sentiment: CFO Kevin Rubin sold 503 shares under a pre-arranged Rule 10b5-1 trading plan. The relatively small transaction reduced his holdings by about 1.2%, so it is a modest sentiment concern rather than a strong indication of weakening fundamentals. Zscaler CFO stock sale

Analysts Set New Price Targets

Several equities analysts have commented on the company. Scotiabank cut their price objective on Zscaler from $190.00 to $175.00 and set a “sector outperform” rating on the stock in a research report on Wednesday, May 27th. KeyCorp lifted their target price on Zscaler from $185.00 to $210.00 and gave the stock an “overweight” rating in a research report on Friday, August 21st. The Goldman Sachs Group reissued a “neutral” rating and set a $179.00 target price on shares of Zscaler in a research note on Wednesday, May 27th. Needham & Company LLC restated a “buy” rating and issued a $180.00 price target on shares of Zscaler in a report on Wednesday, June 10th. Finally, Weiss Ratings restated a “sell (e+)” rating on shares of Zscaler in a report on Tuesday, June 9th. Thirty-four analysts have rated the stock with a Buy rating, six have assigned a Hold rating and one has issued a Sell rating to the company. According to data from MarketBeat.com, the company presently has a consensus rating of “Moderate Buy” and an average target price of $216.18.

Zscaler Stock Performance

The company has a market cap of $27.54 billion, a P/E ratio of -354.81, a PEG ratio of 99.13 and a beta of 0.94. The firm has a 50 day moving average of $153.75 and a 200-day moving average of $149.99. The company has a quick ratio of 1.86, a current ratio of 1.86 and a debt-to-equity ratio of 0.72.

Zscaler (NASDAQ:ZS) last released its quarterly earnings data on Tuesday, May 26th. The company reported $1.08 EPS for the quarter, topping the consensus estimate 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 company had revenue of $850.48 million for the quarter, compared to the consensus estimate of $835.14 million. During the same period last year, the business posted $0.84 EPS. Zscaler’s quarterly revenue was up 25.4% on a year-over-year basis. As a group, sell-side analysts anticipate that Zscaler, Inc. will post 0.13 EPS for the current fiscal year.

Insider Transactions at Zscaler

In related news, insider Adam Geller sold 2,817 shares of Zscaler stock in a transaction dated Monday, June 22nd. The stock was sold at an average price of $122.60, for a total value of $345,364.20. Following the completion of the sale, the insider directly owned 42,314 shares in the company, valued at $5,187,696.40. The trade was a 6.24% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Robert Schlossman sold 3,146 shares of the company’s stock in a transaction dated Tuesday, June 16th. The stock was sold at an average price of $126.43, for a total transaction of $397,748.78. Following the completion of the sale, the insider directly owned 69,366 shares of the company’s stock, valued at approximately $8,769,943.38. This trade represents a 4.34% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders sold a total of 16,772 shares of company stock worth $2,139,799 over the last quarter. 17.20% of the stock is owned by corporate insiders.

Institutional Investors Weigh In On Zscaler

Several large investors have recently modified their holdings of ZS. California State Teachers Retirement System raised its position in shares of Zscaler by 13,837.9% in the 2nd quarter. California State Teachers Retirement System now owns 19,388,787 shares of the company’s stock worth $2,736,727,000 after acquiring an additional 19,249,679 shares in the last quarter. BlackRock Inc. bought a new stake in Zscaler during the second quarter valued at about $1,396,028,000. First Trust Advisors LP boosted its position in Zscaler by 36.2% during the first quarter. First Trust Advisors LP now owns 3,518,678 shares of the company’s stock valued at $493,635,000 after purchasing an additional 935,781 shares in the last quarter. Price T Rowe Associates Inc. MD grew its stake in Zscaler by 43.3% in the fourth quarter. Price T Rowe Associates Inc. MD now owns 2,572,358 shares of the company’s stock valued at $578,576,000 after purchasing an additional 777,414 shares during the last quarter. Finally, AQR Capital Management LLC grew its stake in Zscaler by 61.8% in the third quarter. AQR Capital Management LLC now owns 1,941,571 shares of the company’s stock valued at $576,083,000 after purchasing an additional 741,756 shares during the last quarter. 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.