Zscaler (NASDAQ:ZS) Shares Down 8.6% Following Analyst Downgrade

Shares of Zscaler, Inc. (NASDAQ:ZS) traded down 8.6% on Monday after TD Cowen lowered their price target on the stock from $330.00 to $260.00. TD Cowen currently has a buy rating on the stock. Zscaler traded as low as $147.41 and last traded at $146.0770. 1,159,277 shares traded hands during mid-day trading, a decline of 46% from the average session volume of 2,149,925 shares. The stock had previously closed at $159.75.

A number of other brokerages have also commented on ZS. Bank of America lowered their price objective on Zscaler from $355.00 to $335.00 and set a “buy” rating on the stock in a report on Wednesday, November 26th. Morgan Stanley set a $305.00 target price on Zscaler in a research report on Thursday, December 18th. JPMorgan Chase & Co. lowered their price target on Zscaler from $354.00 to $267.00 and set an “overweight” rating on the stock in a report on Friday, February 20th. Barclays set a $220.00 price target on shares of Zscaler in a research report on Thursday, February 19th. Finally, Stifel Nicolaus decreased their price objective on shares of Zscaler from $330.00 to $320.00 and set a “buy” rating for the company in a report on Wednesday, November 26th. One investment analyst has rated the stock with a Strong Buy rating, thirty-four have issued a Buy rating, seven have given a Hold rating and one has assigned a Sell rating to the company’s stock. According to data from MarketBeat, the stock currently has a consensus rating of “Moderate Buy” and a consensus price target of $293.84.

Insider Activity

In other news, insider Robert Schlossman sold 3,084 shares of the company’s stock in a transaction dated Tuesday, December 16th. The shares were sold at an average price of $230.82, for a total transaction of $711,848.88. Following the completion of the transaction, the insider owned 77,002 shares of the company’s stock, valued at approximately $17,773,601.64. This represents a 3.85% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is accessible through the SEC website. Also, EVP Raj Judge sold 3,438 shares of the stock in a transaction dated Tuesday, December 16th. The shares were 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 of the company’s stock, valued at approximately $16,248,343.08. The trade was a 4.66% decrease in their position. The disclosure for this sale is available in the SEC filing. Over the last quarter, insiders sold 19,350 shares of company stock worth $4,471,509. Corporate insiders own 17.20% of the company’s stock.

Key Stories Impacting Zscaler

Here are the key news stories impacting Zscaler this week:

• Positive Sentiment: Zscaler and Bharti Airtel launched an AI & Cyber Threat Research Center to deepen Zscaler’s India footprint and AI security capabilities — a strategic win that supports long‑term revenue and local market influence. Article Title
• Positive Sentiment: A bullish Seeking Alpha piece highlights Zscaler’s strong retention, AI/data security expansion and a growing moat in AI‑agent security — a narrative that can attract long‑term investors despite near‑term margin noise. Article Title
• Positive Sentiment: Rosenblatt reaffirmed its Buy rating with a $280 price target, signalling continued analyst conviction in Zscaler’s growth thesis. Article Title
• Neutral Sentiment: Several large firms lowered price targets (JPMorgan to $267, Mizuho to $265, Robert W. Baird to $300) but generally kept Outperform/Buy ratings — this underscores belief in upside while acknowledging sector multiple compression. Article Title
• Negative Sentiment: BTIG cut its target sharply (from $365 to $209) and sector headlines around Anthropic’s new AI security tool triggered a broad selloff in cybersecurity names, creating near‑term downside risk and multiplier compression for ZS. Article Title
• Negative Sentiment: Market headlines (CNBC/Yahoo/MSN) show Zscaler and peers fell after the Anthropic tool launch, reflecting investor concerns that advanced AI tools may compress demand or replace some vendor workflows in security. Article Title

Institutional Trading of Zscaler

Institutional investors have recently made changes to their positions in the business. Integrated Wealth Concepts LLC raised its position in Zscaler by 19.9% in the first quarter. Integrated Wealth Concepts LLC now owns 1,439 shares of the company’s stock worth $285,000 after purchasing an additional 239 shares in the last quarter. NewEdge Advisors LLC grew its stake in shares of Zscaler by 8.2% in the 1st quarter. NewEdge Advisors LLC now owns 4,899 shares of the company’s stock valued at $972,000 after purchasing an additional 370 shares during the period. Empowered Funds LLC grew its stake in shares of Zscaler by 9.2% in the 1st quarter. Empowered Funds LLC now owns 2,811 shares of the company’s stock valued at $558,000 after purchasing an additional 238 shares during the period. Sivia Capital Partners LLC acquired a new position in shares of Zscaler in the 2nd quarter worth approximately $252,000. Finally, Brookstone Capital Management bought a new position in shares of Zscaler during the 2nd quarter worth approximately $283,000. 46.45% of the stock is currently owned by institutional investors and hedge funds.

Zscaler Price Performance

The company has a 50-day moving average of $203.32 and a 200 day moving average of $257.39. The company has a debt-to-equity ratio of 0.86, a quick ratio of 1.82 and a current ratio of 1.82. The firm has a market cap of $23.82 billion, a P/E ratio of -574.44, a P/E/G ratio of 292.08 and a beta of 1.02.

Zscaler (NASDAQ:ZS) last released its quarterly earnings data on Tuesday, November 25th. The company reported $0.96 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.85 by $0.11. The firm had revenue of $788.11 million during the quarter, compared to analyst estimates of $773.86 million. Zscaler had a negative return on equity of 0.12% and a negative net margin of 1.45%.The business’s revenue for the quarter was up 25.5% compared to the same quarter last year. During the same period in the prior year, the company posted $0.77 earnings per share. On average, sell-side analysts anticipate that Zscaler, Inc. will post -0.1 EPS for the current year.

About Zscaler

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.