Zscaler (NASDAQ:ZS) Shares Gap Down – Here’s What Happened

Zscaler, Inc. (NASDAQ:ZS)’s share price gapped down prior to trading on Friday. The stock had previously closed at $214.64, but opened at $206.00. Zscaler shares last traded at $196.63, with a volume of 1,063,462 shares changing hands.

Zscaler News Roundup

Here are the key news stories impacting Zscaler this week:

• Positive Sentiment: Mizuho raised its price target for Zscaler from $210 to $220 and maintained an “Outperform” rating, citing potential upside from current trading levels.
• Positive Sentiment: Zscaler recently launched its Agentic SOC, an AI-focused security operations platform that uses proprietary telemetry, zero-trust data and AI agents developed with Anthropic and OpenAI. The offering could strengthen the company’s competitive position in AI-driven cybersecurity.
• Positive Sentiment: The company is scheduled to hold an Investor Day on October 6, where management is expected to discuss its strategy, long-term growth drivers and financial outlook. Zscaler to Host Investor Day on October 6
• Neutral Sentiment: Analysts and market commentary continue to identify Zscaler as a long-term growth stock, supported by its cybersecurity platform and expansion opportunities. However, these assessments do not represent a new operating announcement or near-term earnings catalyst. Why Zscaler Is a Top Growth Stock for the Long-Term
• Negative Sentiment: Chief Revenue Officer Mike Rich is stepping down for personal reasons, effective October 1. Ross Tackett, Zscaler’s worldwide head of sales, will succeed him. Investors appear concerned about potential disruption to sales execution and customer momentum, despite the internal promotion and analysts’ view that the transition should be limited. Zscaler Shares Slide on CRO Departure, but Analysts See Limited Disruption

Wall Street Analysts Forecast Growth

Several research firms have recently weighed in on ZS. Roth Capital reiterated a “neutral” rating and set a $170.00 target price on shares of Zscaler in a research report on Saturday, September 5th. Wedbush initiated coverage on shares of Zscaler in a report on Friday, September 11th. They issued an “outperform” rating and a $215.00 price target on the stock. Piper Sandler raised their price target on shares of Zscaler from $160.00 to $175.00 and gave the stock a “neutral” rating in a research note on Friday, September 4th. Deutsche Bank Aktiengesellschaft reiterated a “buy” rating on shares of Zscaler in a report on Friday, September 4th. Finally, Sanford C. Bernstein boosted their price objective on shares of Zscaler from $224.00 to $298.00 and gave the company an “outperform” rating in a research report on Thursday, September 17th. Thirty-four equities research analysts have rated the stock with a Buy rating, six have assigned a Hold rating and two have issued a Sell rating to the stock. Based on data from MarketBeat.com, the company has a consensus rating of “Moderate Buy” and an average price target of $219.28.

Zscaler Trading Down 8.3%

The company has a market capitalization of $32.08 billion, a PE ratio of -501.23, a price-to-earnings-growth ratio of 23.95 and a beta of 0.95. The company’s fifty day moving average is $173.38 and its 200-day moving average is $153.31. The company has a debt-to-equity ratio of 0.65, a current ratio of 1.70 and a quick ratio of 1.70.

Zscaler (NASDAQ:ZS) last issued its quarterly earnings data on Thursday, September 3rd. The company reported $1.19 EPS for the quarter, topping analysts’ consensus estimates of $1.09 by $0.10. The company had revenue of $898.19 million during the quarter, compared to the consensus estimate of $876.96 million. Zscaler had a negative net margin of 1.88% and a positive return on equity of 1.23%. Zscaler’s revenue for the quarter was up 24.9% compared to the same quarter last year. During the same quarter in the previous 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, analysts anticipate that Zscaler, Inc. will post 0.64 EPS for the current fiscal year.

Insider Transactions at Zscaler

In related news, CFO Kevin Rubin sold 5,957 shares of the firm’s stock in a transaction dated Wednesday, September 16th. The stock was sold at an average price of $192.76, for a total transaction of $1,148,271.32. Following the sale, the chief financial officer owned 43,287 shares of the company’s stock, valued at $8,344,002.12. This trade represents a 12.10% decrease in their ownership of the stock. The sale 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 Adam Geller sold 5,578 shares of Zscaler stock in a transaction dated Wednesday, September 16th. The shares were sold at an average price of $192.76, for a total value of $1,075,215.28. Following the completion of the transaction, the insider owned 43,553 shares in the company, valued at $8,395,276.28. This trade represents a 11.35% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. In the last quarter, insiders sold 28,656 shares of company stock worth $5,526,076. Company insiders own 17.20% of the company’s stock.

Institutional Trading of Zscaler

Hedge funds have recently modified their holdings of the company. WINTON GROUP Ltd raised its stake in shares of Zscaler by 56.5% during the 2nd quarter. WINTON GROUP Ltd now owns 4,890 shares of the company’s stock worth $690,000 after acquiring an additional 1,765 shares in the last quarter. NewEdge Advisors LLC lifted its position in Zscaler by 7.8% during the second quarter. NewEdge Advisors LLC now owns 4,626 shares of the company’s stock valued at $653,000 after acquiring an additional 336 shares during the last quarter. Hudock Inc. acquired a new stake in Zscaler in the second quarter valued at approximately $311,000. Allworth Financial LP boosted its stake in Zscaler by 7.7% in the second quarter. Allworth Financial LP now owns 3,578 shares of the company’s stock valued at $505,000 after acquiring an additional 256 shares in the last quarter. Finally, Arizona State Retirement System grew its holdings in Zscaler by 6.4% in the second quarter. Arizona State Retirement System now owns 29,965 shares of the company’s stock worth $4,230,000 after purchasing an additional 1,799 shares during the last quarter. 46.45% of the stock is owned by hedge funds and other institutional investors.

Zscaler Company Profile

Zscaler, Inc is a cloud-native cybersecurity company that provides security services designed to help organizations connect users, devices, applications and workloads securely over the internet. Its platform is built around a zero-trust security model, which verifies access based on identity, context and policy rather than relying primarily on a traditional corporate network perimeter.

The company’s offerings include Zscaler Internet Access, which secures access to internet and software-as-a-service applications, and Zscaler Private Access, which provides secure, policy-based access to private applications without requiring conventional virtual private networks.