Zscaler (NASDAQ:ZS) Reaches New 52-Week Low on Analyst Downgrade

Zscaler, Inc. (NASDAQ:ZS)’s share price hit a new 52-week low during mid-day trading on Friday after Zacks Research downgraded the stock from a hold rating to a strong sell rating. The stock traded as low as $141.29 and last traded at $141.8860, with a volume of 4528331 shares changing hands. The stock had previously closed at $167.36.

Several other research firms also recently commented on ZS. Morgan Stanley cut their target price on shares of Zscaler from $305.00 to $200.00 and set an “overweight” rating on the stock in a research report on Friday. Capital One Financial set a $320.00 price target on shares of Zscaler and gave the company an “overweight” rating in a research note on Wednesday, November 26th. Berenberg Bank reduced their price objective on shares of Zscaler from $390.00 to $320.00 and set a “buy” rating on the stock in a research note on Friday. BTIG Research decreased their price objective on Zscaler from $365.00 to $209.00 and set a “buy” rating for the company in a report on Tuesday, February 24th. Finally, Robert W. Baird lowered their target price on Zscaler from $360.00 to $300.00 and set an “outperform” rating for the company in a research report on Monday, February 23rd. One analyst has rated the stock with a Strong Buy rating, thirty-four have given a Buy rating, six have given a Hold rating and two have assigned a Sell rating to the stock. Based on data from MarketBeat, the stock has an average rating of “Moderate Buy” and a consensus target price of $274.37.

Insider Buying and Selling at Zscaler

In other Zscaler news, Director James A. Beer sold 653 shares of the business’s stock in a transaction that occurred on Friday, January 2nd. The shares were sold at an average price of $226.72, for a total value of $148,048.16. Following the completion of the transaction, the director owned 3,485 shares of the company’s stock, valued at $790,119.20. The trade was a 15.78% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. Also, EVP Raj Judge sold 3,438 shares of the firm’s stock in a transaction on Tuesday, December 16th. The shares were sold at an average price of $230.82, for a total transaction of $793,559.16. Following the sale, the executive vice president owned 70,394 shares in the company, valued at approximately $16,248,343.08. This trade represents a 4.66% decrease in their position. The SEC filing for this sale provides additional information. Insiders sold a total of 19,350 shares of company stock valued at $4,471,509 over the last quarter. Company insiders own 17.20% of the company’s stock.

More Zscaler News

Here are the key news stories impacting Zscaler this week:

• Positive Sentiment: Q2 results beat: adjusted EPS $1.01 vs. $0.89 est., revenue $815.8M vs. ~$799M est., and ARR grew ~25% year/year — signals demand momentum. GlobeNewswire: Q2 Results
• Positive Sentiment: Management is pitching AI security growth and new initiatives (AI Guard, agentic security, India AI/Cyber center with Airtel) as durable secular drivers that expand TAM beyond seat-based SaaS. CFO Interview Airtel AI Center
• Neutral Sentiment: Management issued updated forward guidance and commentary (Q3 EPS range and FY EPS range were provided), creating mixed signals that markets are parsing. Earnings Highlights
• Neutral Sentiment: Executives (CEO & CFO) gave interviews and the full call transcript is available — useful for investors wanting detail on churn, acquisitions and how AI monetization will scale. Earnings Call Transcript
• Negative Sentiment: Wider GAAP loss and higher spending: the company posted a larger net loss driven by increased sales, marketing and R&D, which pressured investor sentiment. Reuters: Wider Loss
• Negative Sentiment: Mixed/uncertain revenue outlook commentary: some outlets reported the company lowered aspects of its revenue outlook, creating confusion and weighing on the stock despite EPS beats. Benzinga: Revenue Guidance Report
• Negative Sentiment: Broad analyst price‑target cuts today from multiple firms (Canaccord, Morgan Stanley, Oppenheimer, Berenberg, Needham, and others) have amplified selling pressure even as many kept “buy/outperform” stances — the cuts compress perception of near‑term upside. MarketScreener: Analyst Cuts
• Negative Sentiment: Market reaction: investors appear to be focusing on margin/expense trajectory, competitive pressure and near-term revenue clarity rather than the company’s AI growth story — producing the stock decline. Seeking Alpha: Market Reaction

Institutional Trading of Zscaler

Hedge funds have recently added to or reduced their stakes in the business. Binnacle Investments Inc bought a new position in shares of Zscaler during the third quarter valued at about $25,000. Tradewinds Capital Management LLC boosted its holdings in Zscaler by 145.7% during the 3rd quarter. Tradewinds Capital Management LLC now owns 86 shares of the company’s stock valued at $26,000 after acquiring an additional 51 shares during the period. Root Financial Partners LLC bought a new position in Zscaler during the 3rd quarter worth approximately $26,000. McIlrath & Eck LLC purchased a new position in Zscaler in the 3rd quarter worth approximately $29,000. Finally, AlphaCentric Advisors LLC bought a new stake in Zscaler in the fourth quarter valued at approximately $29,000. 46.45% of the stock is owned by institutional investors.

Zscaler Stock Performance

The company has a debt-to-equity ratio of 0.86, a current ratio of 1.82 and a quick ratio of 1.82. The stock has a market cap of $23.44 billion, a PE ratio of -349.98, a price-to-earnings-growth ratio of 299.64 and a beta of 1.02. The business has a 50 day moving average price of $198.92 and a two-hundred day moving average price of $255.06.

Zscaler (NASDAQ:ZS) last issued its earnings results on Thursday, February 26th. The company reported $1.01 EPS for the quarter, topping the consensus estimate of $0.89 by $0.12. The company had revenue of $815.75 million for the quarter, compared to the consensus estimate of $798.92 million. Zscaler had a negative net margin of 2.25% and a positive return on equity of 0.06%. The firm’s revenue for the quarter was up 25.9% on a year-over-year basis. During the same period in the previous year, the firm earned $0.78 earnings per share. Zscaler has set its Q3 2026 guidance at 1.000-1.010 EPS and its FY 2026 guidance at 3.990-4.020 EPS. As a group, equities research analysts forecast that Zscaler, Inc. will post -0.1 EPS for the current fiscal 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.