Citigroup has revised its price target for Zscaler (NASDAQ: ZS) from $350.00 to $305.00, as detailed in a research note issued to investors on Tuesday. Despite this reduction, Citigroup maintains a “buy” rating on the stock, reflecting confidence in the company’s long-term prospects.
Other financial institutions have also recently evaluated Zscaler. Macquarie initiated coverage on the company last week, setting a target price of $390.00 with an “outperform” rating. In contrast, Robert W. Baird increased its target from $350.00 to $360.00, also assigning an “outperform” designation. Meanwhile, Royal Bank of Canada lowered its target price from $366.00 to $290.00 while maintaining an “outperform” rating. Zacks Research upgraded Zscaler from a “strong sell” to a “hold” rating, and Scotiabank adjusted its target from $334.00 to $320.00 with a “sector outperform” rating.
A review of the consensus ratings reveals that one analyst has issued a Strong Buy rating for Zscaler, while thirty-three have rated it as Buy, eight as Hold, and one as Sell. According to MarketBeat, Zscaler currently holds a consensus rating of “Moderate Buy” alongside a consensus price target of $317.63.
Recent Earnings Performance
Zscaler’s latest quarterly earnings report, released on November 25, 2023, indicated earnings per share (EPS) of $0.96, surpassing the consensus estimate of $0.85 by $0.11. The company’s revenue for the quarter reached $788.11 million, exceeding the expected $773.86 million. Despite these positive figures, Zscaler reported a negative net margin of 1.45% and a negative return on equity of 0.12%. Revenue grew by 25.5% compared to the same quarter in the previous year, when the company reported $0.77 EPS.
Looking ahead, Zscaler has set its fiscal year 2026 guidance at an EPS range of $3.780 to $3.820 and a second quarter guidance of $0.890 to $0.900. Analysts project that Zscaler will post an EPS of -0.1 for the current fiscal year.
Insider Trading Activities
In insider trading news, Chief Financial Officer Kevin Rubin sold 3,303 shares of Zscaler on December 16, 2023, at an average price of $230.82, totaling approximately $762,398.46. Following this transaction, Rubin retains 48,161 shares valued at approximately $11,116,522.02, marking a decrease of 6.42% in his holdings.
Additionally, Executive Vice President Raj Judge sold 3,438 shares on the same day for a total of $793,559.16. After this sale, Judge owns 70,394 shares valued at about $16,248,343.08, reflecting a 4.66% reduction in his ownership. Over the past ninety days, company insiders have sold a total of 22,550 shares, valued at $5,511,509. Currently, insiders hold 17.20% of Zscaler’s stock.
Institutional Investment Trends
Recent activity among institutional investors shows a mix of buying and selling of Zscaler shares. Bessemer Group Inc. increased its holdings by 3.2% during the third quarter, now owning 1,021 shares worth approximately $306,000. Cox Capital Management LLC raised its stake by 0.6%, holding 5,576 shares valued at $1,671,000. Other firms, including Brookstone Capital Management and Wedbush Securities, also reported slight increases in their positions in Zscaler.
Currently, approximately 46.45% of Zscaler’s stock is held by hedge funds and institutional investors, reflecting growing interest in the company amid its ongoing developments.
As Zscaler continues to evolve within the cloud security landscape, it remains focused on delivering innovative solutions that cater to the modern, distributed workforce. The company’s zero trust security model positions it as a competitive player in the industry, aiming to simplify security while safeguarding vital data and applications.
