Zscaler (NASDAQ:ZS) Shares Gap Down – Time to Sell?

Zscaler, Inc. (NASDAQ:ZS)’s stock price gapped down before the market opened on Thursday. The stock had previously closed at $255.80, but opened at $235.51. Zscaler shares last traded at $251.3570, with a volume of 627,849 shares.

Analyst Ratings Changes

A number of research firms recently weighed in on ZS. Weiss Ratings upgraded Zscaler from a “sell (e+)” rating to a “sell (d-)” rating in a report on Thursday, September 24th. BNP Paribas Exane reaffirmed an “outperform” rating and set a $250.00 target price (up from $230.00) on shares of Zscaler in a report on Wednesday, October 7th. Citizens Jmp raised their price objective on Zscaler from $210.00 to $265.00 and gave the stock a “market outperform” rating in a research report on Friday, October 9th. Stifel Nicolaus lifted their price objective on Zscaler from $200.00 to $235.00 and gave the stock a “buy” rating in a research note on Wednesday, October 7th. Finally, Zacks Research raised Zscaler from a “strong sell” rating to a “hold” rating in a research note on Friday, October 2nd. Thirty-seven analysts have rated the stock with a Buy rating, eight have issued a Hold rating and one has issued a Sell rating to the stock. Based on data from MarketBeat.com, the stock has an average rating of “Moderate Buy” and an average price target of $240.14.

Zscaler Stock Performance

The stock has a market capitalization of $39.71 billion, a P/E ratio of -624.30, a price-to-earnings-growth ratio of 24.52 and a beta of 0.94. The company has a current ratio of 1.70, a quick ratio of 1.70 and a debt-to-equity ratio of 0.65. The company has a 50-day moving average price of $201.67 and a two-hundred day moving average price of $167.35.

Zscaler (NASDAQ:ZS) last released its earnings results on Thursday, September 3rd. The company reported $1.19 EPS for the quarter, topping the consensus estimate of $1.09 by $0.10. The business had revenue of $898.19 million during the quarter, compared to analysts’ expectations of $876.96 million. Zscaler had a positive return on equity of 1.23% and a negative net margin of 1.88%. The firm’s revenue was up 24.9% on a year-over-year basis. During the same quarter last year, the firm posted $0.89 earnings per share. 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, equities analysts forecast that Zscaler, Inc. will post 0.69 earnings per share for the current year.

Insider Activity at Zscaler

In other news, CEO Jagtar Chaudhry sold 2,852 shares of the stock in a transaction dated Wednesday, September 16th. The shares were sold at an average price of $192.76, for a total transaction of $549,751.52. Following the transaction, the chief executive officer owned 340,186 shares of the company’s stock, valued at $65,574,253.36. This represents a 0.83% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, insider Robert Schlossman sold 5,394 shares of the firm’s stock in a transaction dated Monday, September 21st. The shares were sold at an average price of $200.00, for a total value of $1,078,800.00. Following the completion of the sale, the insider owned 61,525 shares of the company’s stock, valued at approximately $12,305,000. This represents a 8.06% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 54,064 shares of company stock worth $11,316,078 over the last three months. 17.20% of the stock is currently owned by company insiders.

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently added to or reduced their stakes in ZS. BlackRock Inc. bought a new stake in Zscaler in the 2nd quarter worth about $1,396,028,000. First Trust Advisors LP boosted its stake in shares of 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 during the last quarter. Amundi boosted its stake in shares of Zscaler by 12.8% in the 2nd quarter. Amundi now owns 1,137,837 shares of the company’s stock worth $160,606,000 after buying an additional 129,563 shares during the last quarter. Wellington Management Group LLP grew its holdings in shares of Zscaler by 23.5% in the second quarter. Wellington Management Group LLP now owns 1,103,212 shares of the company’s stock valued at $155,718,000 after acquiring an additional 209,711 shares in the last quarter. Finally, International Assets Investment Management LLC grew its holdings in shares of Zscaler by 23,646.1% in the third quarter. International Assets Investment Management LLC now owns 606,000 shares of the company’s stock valued at $120,849,000 after acquiring an additional 603,448 shares in the last quarter. Institutional investors own 46.45% of the company’s stock.

About Zscaler

Zscaler, Inc is a cloud-based cybersecurity company that helps organizations secure access to applications, websites, data and other digital resources. Its platform is designed around a zero-trust security model, which verifies users and devices and enforces security policies before granting access, rather than relying primarily on a traditional corporate network perimeter.

The company’s offerings include Zscaler Internet Access, which provides secure access to internet and software-as-a-service applications, and Zscaler Private Access, which enables secure access to private applications without extending an organization’s network to users.