Track market-moving stories before they get noisy

On CNBC's “Halftime Report Final Trades,” Malcolm Ethridge, managing partner at Capital Area Planning Group, picked Zscaler, Inc. (NASDAQ:ZS).

Key Takeaways Zscaler is expanding its data security platform as AI adoption raises risks of sensitive information leaks.Data Security ARR tops $500M in Q3 and the solution was in about 70% of Security for AI deals in Q4.A seven-figure Zscaler expansion deal lifted an asset manager's annual spending nearly 40% to over $5M.
Zscaler, Inc. (ZS - Free Report) is strengthening its data security business as companies adopt artificial intelligence (AI) and face growing risks of sensitive information leaks. Its integrated security platform could help enterprises simplify data protection while creating opportunities to win larger deals and expand existing customer relationships.

Data Security has become an important growth driver for Zscaler. In the third quarter of fiscal 2026, its Data Security annual recurring revenues (ARR) crossed $500 million, growing more than 30% year over year. The company offers tools for data discovery, classification, data loss prevention and data security posture management. These capabilities help businesses identify sensitive information and control how it is accessed and shared across cloud applications and endpoints.

Customer demand is also encouraging. In the fourth quarter of fiscal 2026, about 70% of Zscaler’s Security for AI deals included its Data Security solution. This highlights the connection between AI adoption and the need to protect confidential business information. Zscaler also won a seven-figure expansion deal with a global asset management firm that selected its data security posture management solution over a private competitor. The customer’s annual spending increased nearly 40%, reaching more than $5 million in ARR.

The company reported fiscal 2026 revenues of $3.35 billion, up 25% year over year. If data security adoption continues to expand, cross-selling could support future growth and strengthen Zscaler’s position in the AI security market. The Zacks Consensus Estimate for Zscaler’s fiscal 2027 revenues is currently pegged at $3.93 billion, indicating a 17.2% year-over-year increase.

How Do Rivals Fare Against ZS in Data Security Space?Zscaler competes with several cybersecurity players, including Palo Alto Networks, Inc. (PANW - Free Report) and Rubrik, Inc. (RBRK - Free Report) , that are enhancing capabilities in the data security space.

Palo Alto Networks competes with Zscaler through its cloud security and AI-powered security platforms, which help businesses protect applications and sensitive information. In the fourth quarter of fiscal 2026, its revenues grew 34% year over year to $3.41 billion, while Next-Generation Security ARR increased 63% to $9.1 billion. Palo Alto Networks’ broad platform gives customers more options for consolidating security tools.

Rubrik focuses on protecting business data, recovering information after cyberattacks and reducing data-related risks. In the second quarter of fiscal 2027, revenues increased 38% year over year to $427.3 million, while subscription ARR rose 33% to $1.66 billion. Its Rubrik Security Cloud platform also incorporates AI-driven capabilities to strengthen data protection and cyber recovery.

Zscaler’s Price Performance, Valuation & EstimatesZS shares have risen 2.9% year to date, while the Zacks Security industry has surged 82.6%.

Zscaler YTD Price Return Performance
Image Source: Zacks Investment Research

From a valuation standpoint, ZS trades at a forward price-to-sales ratio of 9.27, significantly below the industry’s average of 17.84.

Zscaler Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research

The Zacks Consensus Estimate for Zscaler’s fiscal 2027 and 2028 earnings implies a year-over-year increase of 16.6% and 13.3%, respectively. Estimates for fiscal 2027 and 2028 have been revised upward over the past 30 days.

Image Source: Zacks Investment Research

Zscaler currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Zscaler, Inc. (NASDAQ:ZS) stock is trading higher by almost 7% on Wednesday after DA Davidson initiated coverage with a Neutral rating and announced price target of $215.

NEW YORK, Oct. 20, 2026 (GLOBE NEWSWIRE) -- Pomerantz LLP is investigating claims on behalf of investors of Zscaler, Inc. (“Zscaler” or the “Company”) (NASDAQ: ZS).  Such investors are advised to contact Danielle Peyton at [email protected] or 646-581-9980, ext. 7980.

The investigation concerns whether Zscaler and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices. 

[Click here for information about joining the class action]

On May 26, 2026, Zscaler reported its financial results for the third quarter of its 2026 fiscal year.  Although Zscaler’s revenue and earnings exceeded expectations, the Company guided for current-quarter revenue of between $875 million to $878 million, falling short of the $879 million consensus expectation. 

On this news, Zscaler’s stock price fell $58.19 per share, or 31.52%, to close at $126.41 per share on May 27, 2026. 

Then, on September 24, 2026, Zscaler announced the departure of Mike Rich from his role as the Company’s Chief Revenue Officer. 

On this news, Zscaler’s stock price fell $21.59 per share, or 10.06%, to close at $193.05 per share on September 25, 2026.

Pomerantz LLP, with offices in New York, Chicago, Los Angeles, London, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomlaw.com.

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CONTACT:
Danielle Peyton
Pomerantz LLP
[email protected]
646-581-9980 ext. 7980

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Stock to Watch: Zscaler (ZS - Free Report) Zscaler, Inc. is one of the world’s leading providers of cloud-based security solutions. It offers a broad range of enterprise security services across web and Internet security, private access, data protection, cloud and workload security, branch security, browser security, digital experience monitoring, AI security and security operations. Its Zero Trust Exchange is designed to connect users, devices, workloads and AI agents directly to authorized applications, AI models and data based on identity and business policy.

ZS is a #2 (Buy) on the Zacks Rank, with a VGM Score of B.

Momentum investors should take note of this Computer and Technology stock. ZS has a Momentum Style Score of B, and shares are up 5.1% over the past four weeks.

14 analysts revised their earnings estimate upwards in the last 60 days for fiscal 2027. The Zacks Consensus Estimate has increased $0.36 to $4.91 per share. ZS boasts an average earnings surprise of +10.9%.

With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, ZS should be on investors' short list.

Attacks carried out by artificial intelligence (AI)-powered hackers jumped 89% last year. That's not a "clickbait" headline you may see on X as you scroll. It's also not from a company trying to sell you something. It's CrowdStrike's (CRWD -7.03%) own threat report, built from what it actually sees defending real customers every day. It changes the calculus for everyone buying security software.

A hacker that never sleeps, never gets tired, and never needs a paycheck is a different kind of opponent. Suddenly, the question of whether to defend yourself with one connected system or company or a pile of separate tools is really urgent.

Image source: Getty Images.

This week, it's also a painful question for shareholders. CrowdStrike and Palo Alto Networks (PANW -7.63%) are both down more than 13% from their Oct. 6 record highs.Fortinet (FTNT -7.03%) has slid from its own recent peak, and Okta (OKTA -10.20%) dropped more than 7% so far this week.

This may be because the market got triggered by a report that OpenAI may buy a cybersecurity start-up and compete directly in the space. None of these companies lost a customer or a dollar of revenue over that news. What some of these companies lost is the benefit of the doubt that comes with trading at 100-plus times earnings after gaining over 100% in 2026 alone. That's a valuation story, and it's worth sitting with before buying any dip here.

Here's how I'd sort seven cybersecurity-adjacent stocks into those that are actually consolidating a customer's budget and those that are still selling one tool at a time. Note the honest caveat that this is a low-confidence call, aside from one name.

CRWD CrowdStrike$227.39-$17.18 (-7.03%)

NASDAQ · As of 4:00 PM ET 10/16/26

Platforms, with real receipts
This is where the platform side of the story actually has numbers behind it, not just a nice slide in an investor deck. CrowdStrike is the clearest case of this. Its Falcon Flex bundling program, basically a buy-now-add-later deal that lets customers pay once and pull new tools off the shelf as they need them, has grown its contracted value past $2 billion, more than doubling in a year. That's real evidence customers are choosing to put more tools under one roof instead of just renewing what they already had. This is exactly the behavior you'd expect if AI-powered attacks are making a patchwork of disconnected tools feel riskier by the month.

Palo Alto Networks is leaning into the same bet, adding roughly 220 new "platformization" deals in a recent quarter, more than double the pace from two years earlier. Fortinet earns its spot through sheer scale. It already holds the top spot in network firewalls, and it's using that footprint to cross-sell into newer categories.

Palo Alto Networks is getting way better at convincing existing customers to bundle more of its products together, instead of just buying one thing and walking away. Fortinet, meanwhile, already sells the firewall sitting at the edge of more company networks than almost anyone else. It's using that foothold to pitch those same customers on newer security products once they're already in the door.

PANW Palo Alto Networks$342.00-$28.27 (-7.63%)

NASDAQ · As of 4:00 PM ET 10/16/26

Platforms with caveats
SentinelOne (S -7.66%), Cloudflare (NET -6.33%), and Zscaler (ZS -5.92%) all call themselves platforms, and each has a piece of evidence behind it, but the case is thinner than CrowdStrike's. Cloudflare's security business sits on top of a much bigger internet infrastructure company. Cloudflare calls itself a "connectivity cloud company" in its own filings. It has security (Zero Trust) as just one of three service lines alongside network and developer services, confirming it's one slice of a bigger business, not the whole thing. SentinelOne is smaller and earlier in the bundling game. It has roughly $1.2 billion in annual recurring revenue, about one-fifth the size of CrowdStrike's $5.84 billion, which is why it's smaller.

S SentinelOne$21.58-$1.79 (-7.66%)

NYSE · As of 4:00 PM ET 10/16/26

Zscaler doesn't sell you a pile of separate security products the way some of these other companies do. Instead, it routes a company's internet traffic through its own cloud first, checking it for threats along the way, like a security checkpoint everything has to pass through before it reaches its destination. That's a different approach than bundling tools together, which makes it hard to put this company in any basket. Zscaler doesn't fit neatly into either the "platform" or "point solution" camp.

The point solution
Okta still does one job: verifying who's logging in and what they're allowed to touch. That job matters more as AI agents start needing their own logins and Okta isn't really trying to be the whole security department. According to MarketBeat, Okta's president, Eric Kelleher, says the question companies keep asking isn't whether to use AI agents, but how to keep them in check. Okta's pitch boils down to answering three things: where an agent lives, what it's allowed to touch, and what it's allowed to do.

Krilogy Financial LLC lifted its stake in Zscaler, Inc. (NASDAQ:ZS – Free Report) by 163.0% in the third quarter, according to the company in its most recent 13F filing with the Securities and Exchange Commission. The firm owned 11,008 shares of the company’s stock after acquiring an additional 6,822 shares during the period. Krilogy Financial LLC’s holdings in Zscaler were worth $2,195,000 as of its most recent filing with the Securities and Exchange Commission.

Other institutional investors and hedge funds have also made changes to their positions in the company. BlackRock Inc. acquired a new position in shares of Zscaler during the second quarter valued at approximately $1,396,028,000. First Trust Advisors LP raised its holdings in Zscaler by 36.2% during the first quarter. First Trust Advisors LP now owns 3,518,678 shares of the company’s stock worth $493,635,000 after purchasing an additional 935,781 shares in the last quarter. Connor Clark & Lunn Investment Management Ltd. acquired a new stake in Zscaler in the second quarter worth approximately $102,271,000. Pictet Asset Management Holding SA lifted its position in Zscaler by 52.5% in the first quarter. Pictet Asset Management Holding SA now owns 1,920,540 shares of the company’s stock worth $269,285,000 after purchasing an additional 661,413 shares during the period. Finally, Legal & General Group Plc bought a new position in Zscaler during the 2nd quarter valued at $89,740,000. 46.45% of the stock is currently owned by institutional investors.

Zscaler Stock Down 3.4% NASDAQ ZS opened at $220.79 on Thursday. Zscaler, Inc. has a 12 month low of $114.63 and a 12 month high of $336.99. The company has a market capitalization of $36.00 billion, a P/E ratio of -566.13, a PEG ratio of 21.97 and a beta of 0.94. The company’s 50 day simple moving average is $190.07 and its 200 day simple moving average is $159.06. 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 – Get Free Report) last issued its earnings results on Thursday, September 3rd. The company reported $1.19 earnings per share for the quarter, topping analysts’ consensus estimates of $1.09 by $0.10. The firm had revenue of $898.19 million during the quarter, compared to analysts’ expectations of $876.96 million. Zscaler had a negative net margin of 1.88% and a positive return on equity of 1.23%. The firm’s revenue for the quarter was up 24.9% compared to the same quarter last year. During the same period 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. Equities research analysts expect that Zscaler, Inc. will post 0.69 earnings per share for the current fiscal year. Insider Buying and Selling In related news, insider Adam Geller sold 1,042 shares of Zscaler stock in a transaction on Monday, October 12th. The stock was sold at an average price of $235.95, for a total value of $245,859.90. Following the transaction, the insider directly owned 38,308 shares in the company, valued at $9,038,772.60. The trade was a 2.65% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director James A. Beer sold 177 shares of Zscaler stock in a transaction on Thursday, September 17th. The stock was sold at an average price of $192.01, for a total value of $33,985.77. Following the completion of the transaction, the director owned 4,030 shares in the company, valued at $773,800.30. The trade was a 4.21% 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 54,053 shares of company stock worth $11,256,876 over the last quarter. 17.20% of the stock is currently owned by insiders.

Analysts Set New Price Targets ZS has been the topic of several research analyst reports. Stephens lifted their price target on Zscaler from $225.00 to $265.00 and gave the company an “overweight” rating in a research report on Wednesday, October 7th. Stifel Nicolaus boosted 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. Morgan Stanley upped their price objective on Zscaler from $165.00 to $185.00 and gave the company an “equal weight” rating in a report on Wednesday, October 7th. Wells Fargo & Company upped their price objective on Zscaler from $215.00 to $260.00 and gave the company an “overweight” rating in a report on Wednesday, October 7th. Finally, Citigroup reaffirmed a “market outperform” rating on shares of Zscaler in a research note on Friday, October 9th. Thirty-five investment analysts have rated the stock with a Buy rating, seven have given a Hold rating and one has issued a Sell rating to the company’s stock. Based on data from MarketBeat.com, Zscaler presently has an average rating of “Moderate Buy” and a consensus price target of $239.41.

Read Our Latest Research Report on ZS

More Zscaler News Here are the key news stories impacting Zscaler this week:

Positive Sentiment: Investor-day outlook remains supportive: Zscaler reaffirmed its fiscal 2027 guidance and outlined a long-term path toward roughly $8 billion in annual recurring revenue, with additional potential from AI-driven cybersecurity demand. Several analysts subsequently raised their price targets. Zscaler investor-day outlook Positive Sentiment: Analyst sentiment is generally favorable: Recent target increases included Baird’s $285 target and JMP’s $265 target. MarketBeat data shows a “Moderate Buy” consensus, although targets vary considerably. Zscaler analyst ratings Neutral Sentiment: Investor attention is elevated: ZS has been among the most-searched stocks on Zacks, but high interest alone does not establish a fundamental catalyst and analyst opinions remain mixed. Investors search Zscaler Negative Sentiment: Valuation and growth risks are limiting upside: A recent analysis rated Zscaler “Hold,” arguing that the rally has already removed much of the favorable risk/reward. Weak fiscal 2027 net new ARR guidance, possible revenue-growth moderation and competition from CrowdStrike and Palo Alto Networks remain concerns. Zscaler valuation analysis Negative Sentiment: Insider selling adds pressure: Chief Product Officer Adam Geller sold approximately $5.65 million of shares, including a larger sale disclosed recently. The transactions were conducted under a pre-arranged Rule 10b5-1 plan, reducing their significance as a direct signal of company fundamentals but potentially weighing on sentiment. Zscaler insider sale Negative Sentiment: Legal scrutiny is an additional overhang: Pomerantz LLP announced an investigation into potential investor claims involving Zscaler. The announcement does not establish wrongdoing, but it may increase headline and litigation risk. Pomerantz Zscaler investor alert About Zscaler (Free Report)

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

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

See Also Five stocks we like better than Zscaler Tesla Wants to Make Its Own Chips—What Could Go Wrong? IREN Limited’s AI Pivot Gains Traction—But Can Its Data Centers Deliver? PBF Energy’s Stunning Rally Faces a Critical Test Citi Stock Falls Despite Earnings Beat: What Investors Need to Know

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Cyber criminals have increasing capabilities with the availability of agentic AI.

*Stock prices used were the afternoon prices of Oct. 8, 2026. The video was published on Oct. 10, 2026.

Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Zscaler. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

Zscaler is rated HOLD after a recent price surge erased its prior risk/reward asymmetry, despite strong business momentum and sector-leading value metrics. ZS's FY27 guidance for net new ARR is weak, capping upside until management demonstrates renewed growth or revises guidance upward in upcoming quarters. AI-driven risks—seat-based pricing exposure and competitive threats—remain central to ZS's valuation discount versus peers like CrowdStrike and Palo Alto.

Zscaler (ZS - Free Report) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.

Over the past month, shares of this cloud-based information security provider have returned +17.8%, compared to the Zacks S&P 500 composite's +2.1% change. During this period, the Zacks Security industry, which Zscaler falls in, has gained 24.8%. The key question now is: What could be the stock's future direction?

While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.

Earnings Estimate RevisionsRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.

We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

Zscaler is expected to post earnings of $1.16 per share for the current quarter, representing a year-over-year change of +20.8%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.8%.

The consensus earnings estimate of $4.91 for the current fiscal year indicates a year-over-year change of +16.6%. This estimate has changed +8.3% over the last 30 days.

For the next fiscal year, the consensus earnings estimate of $5.56 indicates a change of +13.3% from what Zscaler is expected to report a year ago. Over the past month, the estimate has changed +1.3%.

Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Zscaler is rated Zacks Rank #3 (Hold).

The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:

12 Month EPS

Revenue Growth ForecastWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.

For Zscaler, the consensus sales estimate for the current quarter of $937.61 million indicates a year-over-year change of +19%. For the current and next fiscal years, $3.93 billion and $4.55 billion estimates indicate +17.2% and +15.8% changes, respectively.

Last Reported Results and Surprise HistoryZscaler reported revenues of $898.18 million in the last reported quarter, representing a year-over-year change of +24.9%. EPS of $1.19 for the same period compares with $0.89 a year ago.

Compared to the Zacks Consensus Estimate of $877.14 million, the reported revenues represent a surprise of +2.4%. The EPS surprise was +9.17%.

The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.

ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.

Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.

As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.

Zscaler is graded F on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.

ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Zscaler. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.

Key Takeaways Zscaler expects FY27 revenue growth of 17%, down from 25% in FY26, despite rising AI demand.Security for AI bookings surged over 50% QoQ in Q4, highlighting growing demand for AI security products.About 70% of AI security deals included Data Security, while metered offerings ARR grew over 100% in FY26.
Zscaler, Inc. (ZS - Free Report) faces a key challenge as its revenue growth is expected to slow in fiscal 2027. However, rising demand for artificial intelligence (AI) security products could help the cybersecurity company strengthen customer relationships and create new growth opportunities. The key question is whether these offerings can generate enough business to offset slower growth elsewhere.

In fiscal 2026, Zscaler’s revenues increased 25% year over year to $3.35 billion, while annual recurring revenues (ARR) rose 25% to $3.77 billion. However, management expects fiscal 2027 revenues of $3.91-$3.94 billion, implying growth of roughly 17%. This outlook signals that Zscaler must convert new opportunities into revenues to sustain its earlier growth pace.

AI security offers one potential solution. Security for AI bookings grew more than 50% sequentially in the fourth quarter of fiscal 2026. Zscaler is also developing products such as Zero Trust Exchange for Agents and Endpoint AI Security to address risks from AI applications and autonomous agents. These offerings could help enterprises protect sensitive data, manage access and reduce exposure to emerging threats.

The opportunity extends beyond new products. About 70% of Security for AI deals in the fourth quarter included Data Security, creating opportunities to sell additional services to existing customers. Meanwhile, non-seat-based metered offerings accounted for around 30% of new and upsell annual contract value in fiscal 2026, with related ARR growing more than 100% year over year.

Still, strong bookings must translate into sustained revenue growth. Zscaler needs to scale its new AI products, win new customers and expand spending among existing clients. Its AI portfolio could help narrow the growth gap, but execution will determine the impact. The Zacks Consensus Estimate for fiscal 2027 revenues is currently pegged at $3.93 billion, indicating a year-over-year increase of 17.2%.

Can AI Security Sustain Growth for ZS’ Rivals?Palo Alto Networks, Inc. (PANW - Free Report) and Fortinet Inc. (FTNT - Free Report) are among the biggest competitors of Zscaler in the AI security space.

Palo Alto Networks is seeing growing demand for its AI security products as enterprises move more AI workloads into production. Prisma AIRS, the company's AI security platform, surpassed $100 million in ARR in the fourth quarter of fiscal 2026. It reached this milestone within four quarters of general availability, making it the fastest-scaling product in Palo Alto Networks' history. The product also had more than 800 customers, with most of the company's largest transactions in the fourth quarter, including multiple Prisma AIRS modules.

In fourth-quarter fiscal 2026, revenues grew 34% year over year to $3.41 billion, while Next-Generation Security annual recurring revenues surged 63% to $9.1 billion. Revenues from the Network & AI Security segment reached $2.33 billion in the fourth quarter.

Fortinet is another competitor building AI security capabilities across its platform. On Aug. 17, 2026, the company acquired Virtue AI, adding agentic AI red-teaming, continuous AI validation, agent governance and real-time guardrails that complement its FortiAIGate solution for protecting large language models. Fortinet's strategy of integrating networking and security on a single operating system, FortiOS, powered by its proprietary FortiASIC chips, resonates strongly with enterprises modernizing infrastructure for AI.

In the second quarter of 2026, revenues climbed 26% year over year to $2.05 billion, as product revenues soared 52% to $773 million on robust FortiGate unit growth and higher average selling prices. Billings jumped 33% to $2.37 billion. In the second quarter, Fortinet also secured an eight-figure deal from a neocloud provider to protect AI data centers, underscoring its price-to-performance advantage. Customer investments to secure AI workloads and mitigate AI-related risks drove both new business and upgrade activity across the installed base.

Zscaler’s Price Performance, Valuation & EstimatesZS shares have returned 3.9% year to date, while the Zacks Security industry has surged 117.6%.

Zscaler YTD Price Return Performance
Image Source: Zacks Investment Research

From a valuation standpoint, ZS trades at a forward price-to-sales ratio of 9.40, significantly below the industry’s average of 21.34.

Zscaler Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research

The Zacks Consensus Estimate for Zscaler’s fiscal 2027 and 2028 earnings implies a year-over-year increase of 16.6% and 13.3%, respectively. Estimates for fiscal 2027 have been revised upward over the past 30 days, while for fiscal 2028 estimates have been raised in the past seven days.

Image Source: Zacks Investment Research

Zscaler currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Zscaler is rated a Buy, benefiting from robust AI-driven security demand and a credible path to double ARR by 2031. ZS's ARR reached $3.8B last quarter, up 25% YoY, with expanding margins and strong operating leverage supporting long-term growth. Competitive risks from Palo Alto and Microsoft persist, but ZS's high switching costs, deep enterprise integration, and global infrastructure provide durable moats.

Zscaler just dropped two pieces of news that sent the entire cybersecurity sector surging well past the broader market, and the debate over whether the rally holds any staying power is only getting louder.

A reaffirmed revenue outlook and a fresh security partnership have pushed cybersecurity to the front of the market, and the group’s leader is setting the pace. Zscaler (NASDAQ:ZS | ZS Price Prediction) shares are up 6% to $230.74, heading a rally that’s lifting the sector’s largest platform vendors along with it.

Meanwhile, Palo Alto Networks (NASDAQ:PANW) stock is up 4% to $415.78, trailing the gain in Zscaler stock while still posting a strong advance for a company of its scale. Also, CrowdStrike Holdings (NASDAQ:CRWD) shares are up 4% to $272.77, another solid climb that sits behind the leader’s.

Broader fund readings confirm that the strength runs well beyond three tickers. The First Trust NASDAQ Cybersecurity ETF (NASDAQ:CIBR) is up 3%, a gain spread across the wider security basket. That compares favorably to the SPDR S&P 500 ETF Trust, which is up 0.5%, leaving cybersecurity far ahead of the broad market.

Reaffirmed Outlook and IBM Pact Lift Zscaler Zscaler reaffirmed its full-year revenue outlook earlier this week, guiding to $3.91 billion to $3.94 billion. Confirming that range eases a worry that has hung over the whole group, namely that enterprise security spending was beginning to slow, a concern that would hit every vendor in the space. For a company holding its guidance, a steady forecast carries more weight than a routine update typically would.

Zscaler made an announcement alongside the outlook. It announced a collaboration with IBM (NYSE:IBM) and Red Hat aimed at protecting private applications during the window between the public disclosure of a software vulnerability and the arrival of a patch. That gap is the period when attackers move fastest, which makes it one of the most exposed moments in any enterprise’s security program, and both items landed earlier in the week, so the rally reflects a continued response to that news.

With Zscaler stock at the front of the rally, Zscaler’s guidance stands as the cleanest evidence available on where security budgets are heading. The cybersecurity fund’s 3% gain, set against the S&P 500 fund’s 0.5% rise, supports that interpretation. A confirmed range from a pure-play zero-trust vendor offers a clear look at whether enterprises are still putting money to upgrading their defenses.

What to Watch Next Zscaler’s bull case is that confirming guidance removes the fear that security spending was slowing. Supporters can also point to the vulnerability window as a problem enterprises pay to solve, which gives the IBM and Red Hat work a clear commercial purpose. On that view, the steady outlook and the new collaboration point in the same direction, toward durable demand for zero-trust security.

However, the bear case deserves equal attention, and it centers on what a repeated forecast can’t deliver, since reaffirming an existing outlook adds no new growth and Zscaler shares have already rallied sharply in the session. That leaves little room for error if the next quarter disappoints.

Shareholders can watch for whether the IBM and Red Hat collaboration turns into customer wins that support Zscaler’s reaffirmed range. Early evidence of demand for the vulnerability-window protection could help settle the debate between those two camps. Position sizes should stay measured, since a stock that has climbed this far can reverse quickly on any stumble.

Contact [email protected] for any questions or corrections.

, /PRNewswire/ -- Pomerantz LLP is investigating claims on behalf of investors of Zscaler, Inc. ("Zscaler" or the "Company") (NASDAQ: ZS).  Such investors are advised to contact Danielle Peyton at [email protected] or 646-581-9980, ext. 7980.

The investigation concerns whether Zscaler and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices. 

[Click here for information about joining the class action]

On May 26, 2026, Zscaler reported its financial results for the third quarter of its 2026 fiscal year.  Although Zscaler's revenue and earnings exceeded expectations, the Company guided for current-quarter revenue of between $875 million to $878 million, falling short of the $879 million consensus expectation. 

On this news, Zscaler's stock price fell $58.19 per share, or 31.52%, to close at $126.41 per share on May 27, 2026. 

Then, on September 24, 2026, Zscaler announced the departure of Mike Rich from his role as the Company's Chief Revenue Officer. 

On this news, Zscaler's stock price fell $21.59 per share, or 10.06%, to close at $193.05 per share on September 25, 2026.

Pomerantz LLP, with offices in New York, Chicago, Los Angeles, London, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomlaw.com.

Attorney advertising. Prior results do not guarantee similar outcomes. 

CONTACT:
Danielle Peyton
Pomerantz LLP
[email protected]
646-581-9980 ext. 7980

SOURCE Pomerantz LLP

Zscaler Inc. (NASDAQ:ZS)’s reaffirmation of its fiscal 2027 guidance supports confidence in its near-term growth outlook, but its $10 billion annual recurring revenue target for fiscal 2031 looks ambitious, Jefferies said.

The cybersecurity company reaffirmed its first-quarter and fiscal 2027 guidance at its investor day, easing concerns about disruption from recent go-to-market leadership changes.

Jefferies said Zscaler’s broader strategy remains unchanged, although management is placing greater emphasis on winning new customers, and expects efficiency to improve over the next six to 12 months.

The bank raised its price target to $250, valuing Zscaler at 18.5 times estimated fiscal 2031 enterprise value to free cash flow under its $8 billion ARR scenario.

The bank said there could be some customer or employee attrition in the first half of fiscal 2027, but new growth disclosures increased its confidence that Zscaler could outperform its fiscal 2027 ARR guidance.

Jefferies sees two to three percentage points of potential upside to the company’s fiscal 2027 ARR growth outlook.

Zscaler set a fiscal 2031 ARR target of more than $8 billion, implying a compound annual growth rate of about 17% from $3.8 billion in fiscal 2026.

Management also outlined an upside scenario of $10 billion in ARR, implying growth of about 22% annually, with artificial intelligence (AI) potentially contributing an additional $2 billion.

Jefferies said the $10 billion target would require a significant acceleration in growth and could prove difficult to achieve unless security operations and AI security businesses gain meaningful traction.

The bank said Zscaler’s Agentic SecOps business generated $235 million of fiscal 2026 ARR, up 21% organically excluding $141 million from the Red Canary acquisition.

The offering combines agentic security operations, deception, exposure management, threat hunting and managed detection and response, with management targeting a $57 billion total addressable market.

Jefferies remains cautious about near-term traction and expects CrowdStrike to be a strong competitor because of its established position in endpoint security and security operations.

Kevin Rubin, CFO of Zscaler (ZS), joins Market on Close to discuss why the cybersecurity company reaffirmed first-quarter and full-year 2027 guidance during the firm's investor day. As Kevin explains, AI is becoming the biggest tailwind for Zscaler due to customer needs to fend off cyberattacks from AI agents.

Palo Alto vs. Zscaler: Which Cybersecurity Stock Looks Stronger After Earnings?Zscaler NASDAQ: ZS used its 2026 Investor Day to position its Zero Trust Exchange platform as a cybersecurity architecture designed for the growing use of artificial intelligence, while outlining a path to more than $8 billion in annual recurring revenue by fiscal 2031 and a potential upside case of $10 billion.

Founder, Chairman and CEO Jay Chaudhry said AI represents the company’s largest business tailwind to date, as enterprises face a growing number of exposed applications, AI agents and data-security risks. He argued that Zscaler’s approach—connecting authorized entities to specific resources through its platform rather than placing users and devices on a trusted network—can reduce attack surfaces and limit lateral movement after an intrusion.

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Zscaler’s Strong Quarter Still Left Investors Waiting on 1 Key Signal“Attackers can’t breach if they can’t reach,” Chaudhry said, describing the company’s effort to hide authenticated applications behind its Zero Trust Exchange.

AI security and platform expansion Management highlighted four product categories: Zero Trust SASE Everywhere, data security, Security for AI and Agentic SecOps. The company said its Zero Trust SASE offerings extend beyond users to branches, cloud workloads, operational technology, internet-of-things devices and AI agents.

Contrarian Alert: 5 Downgraded Stocks That May Reward Long-Term InvestorsChief Product Officer Adam Geller said the company has expanded its product-development focus over the past 12 to 18 months toward new “beachheads” for customer acquisition in users, branch and cloud deployments. He cited browser security, Zero Trust Branch and Zero Trust Gateway for cloud workloads as opportunities to win customers that may not initially deploy Zscaler’s traditional internet-access or private-access offerings.

Geller said 40% of Zero Trust Branch customers are new Zscaler customers. He also said approximately 30% of Zscaler Internet Access user licenses do not include Zscaler Private Access, which management views as an opportunity for expansion.

In security operations, Geller said Zscaler recently introduced an Agentic SecOps offering that combines exposure management and threat management. The offering uses more than 50 agents trained on Zscaler telemetry and informed by the company’s ThreatLabz and Red Canary security teams, he said.

Executive Vice President of AI Security and Strategic Initiatives Dhawal Sharma said the company’s data-security business exceeds $400 million and has grown at a 31% compound annual growth rate. He said 70% of Security for AI deals in the fiscal fourth quarter included data security, reflecting the relationship between AI adoption and data-governance needs.

Sharma described the company’s AI security portfolio as including AI asset discovery, data and identity relationship mapping, AI gateway controls, endpoint AI security, AI red teaming and runtime guardrails. He said the company is seeking to secure both AI interactions and the lifecycle of first-party AI applications.

Customers cite transformation and AI governance needs During a customer panel, AkzoNobel CIO Kurt De Ruwe said the paints and coatings company has used Zscaler to support open internet connectivity across 995 locations and is deploying Zero Trust Branch technology in manufacturing environments. De Ruwe said AkzoNobel had deployed the technology at 69 of 110 factory sites, seeking to reduce its reliance on firewalls and SD-WAN while segmenting legacy operational technology.

Jon Eastern, global head of networks and security at Marsh McLennan, said the insurance broker initially adopted Zscaler to modernize centralized internet access and then accelerated deployment of Zscaler Private Access during the COVID-19 pandemic. He said Zero Trust access has become a foundation of the company’s security model.

Merck Deputy CISO Bob Stasio said the pharmaceutical company is pursuing AI adoption across research, manufacturing and support functions, including through a previously announced $1 billion investment in Google Gemini. Stasio said Merck is focused on AI governance processes that assess risk, apply controls, monitor those controls and support compliance and auditing.

Go-to-market focus and financial framework New Chief Revenue Officer Ross Tackett said Zscaler serves customers in more than 185 countries, with more than 45% of ARR coming from international markets. The company said it has more than 50% of Fortune 500 companies and more than 40% of Global 2000 organizations as customers.

Tackett said Zscaler is increasing the number of sales territories dedicated to winning new customers in fiscal 2027 while also using global systems integrators, value-added resellers, distributors and managed-service partners to expand coverage. He said the company estimates it serves 4,600 of more than 20,000 enterprises globally with more than 1,500 employees.

CFO Kevin Rubin said fiscal 2026 revenue and ARR each grew 25% year over year. Excluding Red Canary, revenue and ARR each grew 20%, while net new ARR grew 14%, he said. Non-GAAP operating margin reached approximately 23%, free-cash-flow margin was 23%, and the company recorded a Rule of 49 performance, according to Rubin.

Zero Trust SASE Everywhere represented approximately $3 billion of ARR. Zero Trust Branch and Cloud reached $250 million of ARR and grew at a 75% ARR CAGR over the past three years, management said. Data security ARR accelerated to 34% growth in fiscal 2026, while bookings rose more than 40% year over year. Security for AI ended fiscal 2026 with approximately $70 million in ARR. Rubin said Zscaler’s three primary growth engines—Zero Trust Branch and Cloud, data security, and Security for AI—collectively delivered 60% ARR growth in fiscal 2026. The company reaffirmed its fiscal 2027 guidance, though it did not provide the specific figures during the Investor Day presentation.

For fiscal 2031, Zscaler said its base-case framework assumes ARR exceeding $8 billion. Management said more rapid adoption of agentic AI could add nearly $2 billion in ARR upside, creating a potential path to $10 billion in ARR. The company also expects continued operating-margin expansion, with capital expenditures remaining elevated through fiscal 2028 before moving toward high-single-digit percentages of revenue as memory and component costs normalize.

About Zscaler (NASDAQ:ZS)Zscaler, Inc is a cloud-based cybersecurity company that provides security services designed to help organizations connect users, applications, devices and workloads securely. Its platform is built around a zero-trust security model, which verifies access based on identity, context and policy rather than relying primarily on traditional network perimeters.

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

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

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CrowdStrike just launched a startup accelerator with Amazon and NVIDIA aimed squarely at the agentic AI era, and it sent the entire cybersecurity sector surging. Whether that enthusiasm survives contact with actual earnings is the question every investor in the…

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A startup accelerator that CrowdStrike (NASDAQ:CRWD | CRWD Price Prediction) runs with Amazon (NASDAQ:AMZN) Web Services and NVIDIA (NASDAQ:NVDA) is triggering a broad bid for cybersecurity names tied to protecting AI agents. CrowdStrike stock is up 3% to $281.77 in morning trading.

Meanwhile, Palo Alto Networks (NASDAQ:PANW) stock is rising 4% to $424.09. Zscaler (NASDAQ:ZS) shares are advancing 4% to $209.82, matching that gain. That leaves CrowdStrike stock as the smallest mover of the three, which points to a sector-wide bid for cybersecurity.

Meanwhile, the First Trust NASDAQ Cybersecurity ETF (NASDAQ:CIBR) is up 2%, a smaller gain for a basket that spreads its weight across a long list of security and networking stocks. The Invesco QQQ Trust (NASDAQ:QQQ) is up 0.6%, so the strength is concentrated in security software while large-cap tech posts a modest advance.

Accelerator Puts Falcon at the Center of Agentic Security CrowdStrike announced the fourth annual edition of its Cybersecurity Startup Accelerator, aimed at early-stage companies building protection products for the agentic era. That term describes software agents that act on their own without waiting for a human instruction, and participants in the CrowdStrike program get an accelerated path to build on its platform, including access to Falcon Foundry agent-creation tools and the company’s programming interfaces.

Startups in the CrowdStrike accelerator can also develop verified integrations and publish in the CrowdStrike Marketplace, while Amazon Web Services adds partner onboarding and marketplace listing support. NVIDIA provides technical training through its startup program. Across its editions, the accelerator has backed more than ninety startups, several since acquired, including one bought by CrowdStrike itself.

Platform Play Meets a Massive Rally The accelerator works as a platform move for CrowdStrike, since it recruits outside companies to build on Falcon and turns access to the CrowdStrike ecosystem into the offering. Daniel Bernard is chief business officer at CrowdStrike. He stated that the next generation of agentic cybersecurity companies is being built now and that the three partners are putting their scale behind those founders. Bernard added that when those companies expand, CrowdStrike grows with them.

Year to date, CrowdStrike stock is up 140%, and that run is the figure to measure against the enthusiasm. An ecosystem announcement doesn’t carry revenue with it, so the return for CrowdStrike from the accelerator sits further out. Follow-through in CrowdStrike’s reported results would do more to justify that climb than any partnership headline.

What to Watch Next The next test for CrowdStrike is whether its agentic positioning turns into modules customers pay for, since partnerships that generate goodwill and little else would leave CrowdStrike stock leaning on sentiment. Investors will want to see signs that accelerator startups ship verified integrations and that those connections pull added Falcon modules into existing CrowdStrike accounts.

With Palo Alto and Zscaler shares posting the bigger moves, the breadth of the sector is the cleaner read on demand for AI security. Traders may want to keep an eye on whether the cybersecurity group holds its gains into the close relative to the Invesco QQQ Trust. Fading strength in Palo Alto and Zscaler shares would signal a short-lived rotation, while a firm finish would support the case for durable demand across the group.

Contact [email protected] for any questions or corrections.

David Moadel

David Moadel is financial writer specializing in stocks, ETFs, options, precious metals, and Bitcoin. David has written well over 1,000 articles for leading online publications, helping investors understand markets, income strategies, and risk.His work has appeared in The Motley Fool, InvestorPlace, U.S. News & World Report, TipRanks, ValueWalk, Benzinga, Market Realist, TalkMarkets, Finmasters, 24/7 Wall St., and others.With a master’s degree in education, David has taught at the elementary, high school, and college levels. That teaching background shapes his writing style: clear, educational, and practical. David has also built a loyal social-media audience by providing trustworthy financial content on YouTube, X/Twitter, and StockTwits.

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Agentic AI took center stage as Zscaler (NASDAQ:ZS | ZS Price Prediction) hosted its Investor Day in New York City and reaffirmed its guidance for the current quarter and the full fiscal year. Zscaler stock is at $207.10, up 3%…

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Agentic AI took center stage as Zscaler (NASDAQ:ZS | ZS Price Prediction) hosted its Investor Day in New York City and reaffirmed its guidance for the current quarter and the full fiscal year. Zscaler stock is at $207.10, up 3% in morning trading. A reaffirmation is a quieter event than a guidance raise, and the bounce suggests the market mainly wanted confirmation that the company’s growth plan is intact.

Meanwhile, shares of CrowdStrike Holdings (NASDAQ:CRWD) are trading at $277.74, up 2%, as the larger endpoint security vendor moves in sympathy with Zscaler stock. CrowdStrike and Palo Alto Networks (NASDAQ:PANW) both compete with Zscaler for enterprise security budgets that agentic AI is expanding; PANW stock is rising 2% this morning to $412.96.

For sector context, the First Trust NASDAQ Cybersecurity ETF (NASDAQ:CIBR) is up 2%. The Invesco QQQ Trust (NASDAQ:QQQ) is up 0.5%, leaving the cybersecurity group well ahead of large-cap tech. Demand tied to agentic AI has kept that group strong, and the cybersecurity fund reached an all-time high in the prior session.

Investor Day Reaffirms Guidance and Pitches Zero Trust for Agentic AI Zscaler is using the New York City event to lay out its strategy, platform innovation and long-term growth drivers, with executives presenting throughout the program. In conjunction with the Investor Day, the company confirmed its previously issued financial guidance for the current quarter and for the full fiscal year. That choice keeps Zscaler’s targets steady while management points the conversation toward a much larger AI opportunity that sits outside the current numbers.

Zscaler’s Jay Chaudhry is chief executive, chairman and founder. He stated that as AI forces every enterprise to rethink its approach to security, the value of the Zscaler Zero Trust architecture is becoming increasingly clear. Chaudhry went further and called the agentic AI era the most significant opportunity in the company’s history. His argument frames agentic AI as the force that turns Zero Trust from one architecture among several into the default, a demand case Zscaler’s confirmed guidance doesn’t yet reflect.

Zscaler Lags a Cybersecurity Group Running to Records Shares of Zscaler are down 8% year to date even with the bounce, while the cybersecurity complex around the company has been running to records. This gap explains why a plain confirmation carries weight, since Zscaler needed to show that its growth plan is on track before the market pays up for the agentic pitch.

Inside the First Trust NASDAQ Cybersecurity ETF, Palo Alto and CrowdStrike shares each carry a heavier weighting than Zscaler stock. The fund’s record run has leaned on names the market already rewarded.

Looking Ahead: Can Agentic Demand Close Zscaler’s Gap? Whether the agentic security budget arrives fast enough to close Zscaler’s gap with already-rewarded peers is the open question now. The focus now is whether Zscaler’s AI products begin to show up in its reported growth, since its maintained outlook doesn’t yet reflect Chaudhry’s demand case. Chaudhry’s pitch gives the company a clear story, and the next step is evidence that customers are spending on it.

That year-to-date discount gives Zscaler stock room to catch up if agentic AI demand speeds up, and the company’s steady guidance offers a floor under the story. However, a reaffirmation leaves the upside case dependent on execution that Zscaler hasn’t yet shown in its numbers. The real test is whether ZS stock holds its gains once the Investor Day presentations wrap up.

Contact [email protected] for any questions or corrections.

Zscaler Founder and CEO Jay Chaudhry tells Yahoo Finance Executive Editor Brian Sozzi that AI agents are becoming the weakest link in corporate security, and the best way to secure them is not to trust them. Chaudhry explains why rogue agents are the biggest risk to companies, how zero trust security applies to agents, and where Zscaler fits in the agentic stack ahead of its first investor day since 2021.

Zscaler (ZS - Free Report) closed the most recent trading day at $196.60, moving -1.1% from the previous trading session. The stock trailed the S&P 500, which registered a daily gain of 0.73%. Elsewhere, the Dow gained 0.49%, while the tech-heavy Nasdaq added 1.19%.

The stock of cloud-based information security provider has risen by 11.8% in the past month, leading the Computer and Technology sector's gain of 6.36% and the S&P 500's gain of 0.55%.

The investment community will be closely monitoring the performance of Zscaler in its forthcoming earnings report. The company's earnings per share (EPS) are projected to be $1.16, reflecting a 20.83% increase from the same quarter last year. Meanwhile, our latest consensus estimate is calling for revenue of $937.61 million, up 18.97% from the prior-year quarter.

For the full year, the Zacks Consensus Estimates project earnings of $4.91 per share and a revenue of $3.93 billion, demonstrating changes of +16.63% and +17.22%, respectively, from the preceding year.

Investors should also note any recent changes to analyst estimates for Zscaler. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 451.17% higher. Zscaler presently features a Zacks Rank of #3 (Hold).

With respect to valuation, Zscaler is currently being traded at a Forward P/E ratio of 40.48. This denotes a discount relative to the industry average Forward P/E of 54.15.

We can additionally observe that ZS currently boasts a PEG ratio of 2.96. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. Security stocks are, on average, holding a PEG ratio of 3.03 based on yesterday's closing prices.

The Security industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 68, putting it in the top 28% of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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As mentioned above, the Scores are designed to work with the Zacks Rank, so any change to a company's earnings outlook should be a deciding factor when picking which stocks to buy.

A stock with a #4 (Sell) or #5 (Strong Sell) rating, for instance, even one with Scores of A and B, will still have a declining earnings forecast, and a greater chance its share price will fall too.

Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: Zscaler (ZS - Free Report) Zscaler, Inc. is one of the world’s leading providers of cloud-based security solutions. It offers a broad range of enterprise security services across web and Internet security, private access, data protection, cloud and workload security, branch security, browser security, digital experience monitoring, AI security and security operations. Its Zero Trust Exchange is designed to connect users, devices, workloads and AI agents directly to authorized applications, AI models and data based on identity and business policy.

ZS is a #3 (Hold) on the Zacks Rank, with a VGM Score of B.

Momentum investors should take note of this Computer and Technology stock. ZS has a Momentum Style Score of A, and shares are up 11.8% over the past four weeks.

For fiscal 2027, 14 analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.36 to $4.91 per share. ZS boasts an average earnings surprise of +10.9%.

With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, ZS should be on investors' short list.

While cybersecurity peers doubled in value over the past year, Zscaler slid past 30% and now sits at a crossroads where one bold analyst sees a very different story unfolding than the rest of Wall Street is willing to admit.

Zscaler (NASDAQ:ZS – Get Free Report)‘s stock had its “outperform” rating reissued by Wedbush in a research report issued on Monday, Benzinga reports. They currently have a $215.00 price target on the stock. Wedbush’s target price would indicate a potential upside of 11.37% from the company’s current price.

A number of other brokerages also recently weighed in on ZS. KeyCorp increased their price target on shares of Zscaler from $185.00 to $210.00 and gave the company an “overweight” rating in a report on Friday, August 21st. Guggenheim reaffirmed a “buy” rating on shares of Zscaler in a research report on Friday. Stifel Nicolaus lifted their target price on Zscaler from $175.00 to $200.00 and gave the stock a “buy” rating in a research report on Wednesday, August 19th. Zacks Research cut Zscaler from a “hold” rating to a “strong sell” rating in a report on Thursday, September 3rd. Finally, Sanford C. Bernstein lifted their price objective on Zscaler from $224.00 to $298.00 and gave the stock an “outperform” rating in a report on Thursday, September 17th. Thirty-four analysts have rated the stock with a Buy rating, six have given a Hold rating and two have issued a Sell rating to the company’s stock. Based on data from MarketBeat, the company presently has a consensus rating of “Moderate Buy” and an average target price of $219.28.

View Our Latest Stock Report on Zscaler

Zscaler Price Performance Shares of Zscaler stock opened at $193.05 on Monday. Zscaler has a 12-month low of $114.63 and a 12-month high of $336.99. The company has a quick ratio of 1.70, a current ratio of 1.70 and a debt-to-equity ratio of 0.65. The stock has a 50 day moving average price of $174.24 and a two-hundred day moving average price of $153.53. The stock has a market capitalization of $31.48 billion, a P/E ratio of -495.00, a PEG ratio of 20.12 and a beta of 0.95. Zscaler (NASDAQ:ZS – Get Free Report) last issued its quarterly earnings results on Thursday, September 3rd. The company reported $1.19 earnings per share (EPS) for the quarter, beating the consensus estimate of $1.09 by $0.10. The company had revenue of $898.19 million for the quarter, compared to the consensus estimate 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% compared to the same quarter last year. During the same period last year, the business 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. Equities analysts expect that Zscaler will post 0.7 earnings per share for the current year.

Insiders Place Their Bets In other Zscaler news, insider Adam Geller sold 5,578 shares of the company’s stock in a transaction on Wednesday, September 16th. The stock was sold at an average price of $192.76, for a total value of $1,075,215.28. Following the sale, the insider directly owned 43,553 shares in the company, valued at $8,395,276.28. This represents a 11.35% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is available at this hyperlink. 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. Also, CFO Kevin Rubin sold 5,957 shares of the stock in a transaction on Wednesday, September 16th. The stock was sold at an average price of $192.76, for a total value of $1,148,271.32. Following the transaction, the chief financial officer owned 43,287 shares of the company’s stock, valued at $8,344,002.12. This represents a 12.10% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders sold a total of 28,656 shares of company stock worth $5,526,076 in the last 90 days. 17.20% of the stock is owned by corporate insiders.

Institutional Investors Weigh In On Zscaler Large investors have recently made changes to their positions in the company. WINTON GROUP Ltd lifted its holdings in Zscaler by 56.5% during the 2nd quarter. WINTON GROUP Ltd now owns 4,890 shares of the company’s stock valued at $690,000 after purchasing an additional 1,765 shares during the last quarter. NewEdge Advisors LLC increased its holdings in shares of Zscaler by 7.8% during the second quarter. NewEdge Advisors LLC now owns 4,626 shares of the company’s stock worth $653,000 after buying an additional 336 shares in the last quarter. Hudock Inc. bought a new position in shares of Zscaler in the second quarter valued at approximately $311,000. Allworth Financial LP boosted its holdings in shares of Zscaler by 7.7% in the 2nd quarter. Allworth Financial LP now owns 3,578 shares of the company’s stock worth $505,000 after acquiring an additional 256 shares in the last quarter. Finally, Arizona State Retirement System grew its position in Zscaler by 6.4% during the 2nd quarter. Arizona State Retirement System now owns 29,965 shares of the company’s stock worth $4,230,000 after acquiring an additional 1,799 shares during the last quarter. Institutional investors own 46.45% of the company’s stock.

About Zscaler (Get Free Report)

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.

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