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

Zscaler, Inc. (NASDAQ:ZS) shares gapped down before the market opened on Wednesday . The stock had previously closed at $175.25, but opened at $168.12. Zscaler shares last traded at $170.9580, with a volume of 418,837 shares trading hands.

Zscaler News Summary

Here are the key news stories impacting Zscaler this week:

• Positive Sentiment: Zscaler announced it will acquire Symmetry Systems, a move that expands its zero-trust platform into AI-agent communication security and identity/data access mapping, which could strengthen its long-term product story and growth opportunity. Article Title
• Positive Sentiment: Jefferies said Zscaler is positioned to beat annual recurring revenue growth expectations ahead of its May 26 earnings report, citing federal demand tailwinds and modeling strong fiscal third-quarter ARR growth. Article Title
• Positive Sentiment: B. Riley upgraded Zscaler to Buy, and UBS also said the setup into earnings looks favorable, reinforcing optimism that the recent pullback may be overdone. Article Title
• Neutral Sentiment: Zscaler also announced upcoming investor conference presentations, which usually help maintain visibility but do not change the near-term fundamentals by themselves. Article Title
• Negative Sentiment: Despite the positive catalysts, recent trading has been volatile and shares have slipped as investors weigh the acquisition, valuation, and the market’s reaction ahead of earnings. Article Title

Wall Street Analyst Weigh In

Several brokerages have commented on ZS. Robert W. Baird cut their target price on Zscaler from $360.00 to $300.00 and set an “outperform” rating on the stock in a research note on Monday, February 23rd. HC Wainwright upgraded Zscaler from a “buy” rating to a “buy” rating in a research note on Monday. Rosenblatt Securities dropped their price target on Zscaler from $250.00 to $223.00 and set a “buy” rating on the stock in a research note on Monday. Oppenheimer dropped their price target on Zscaler from $280.00 to $250.00 and set an “outperform” rating on the stock in a research note on Tuesday, March 10th. Finally, Mizuho decreased their target price on Zscaler from $265.00 to $250.00 and set an “outperform” rating on the stock in a report on Friday, February 27th. Two research analysts have rated the stock with a Strong Buy rating, twenty-nine have issued a Buy rating, eight have issued a Hold rating and two have issued a Sell rating to the company’s stock. According to data from MarketBeat, the company currently has a consensus rating of “Moderate Buy” and an average target price of $261.26.

Zscaler Trading Down 2.0%

The company has a quick ratio of 1.90, a current ratio of 1.90 and a debt-to-equity ratio of 0.78. The stock has a fifty day simple moving average of $143.95 and a 200 day simple moving average of $195.74. The firm has a market capitalization of $27.50 billion, a P/E ratio of -407.17 and a beta of 0.96.

Zscaler (NASDAQ:ZS) last posted its quarterly earnings results on Thursday, February 26th. The company reported $1.01 EPS for the quarter, beating analysts’ consensus estimates of $0.89 by $0.12. The business had revenue of $815.75 million for the quarter, compared to analysts’ expectations of $798.92 million. Zscaler had a positive return on equity of 0.06% and a negative net margin of 2.25%.The business’s quarterly revenue was up 25.9% on a year-over-year basis. During the same period last 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, research analysts forecast that Zscaler, Inc. will post -0.03 EPS for the current year.

Insider Buying and Selling at Zscaler

In other Zscaler news, insider Adam Geller sold 2,094 shares of the firm’s stock in a transaction dated Wednesday, March 18th. The stock was sold at an average price of $153.53, for a total transaction of $321,491.82. Following the sale, the insider directly owned 46,949 shares of the company’s stock, valued at $7,208,079.97. This trade represents a 4.27% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. Also, EVP Raj Judge sold 2,488 shares of Zscaler stock in a transaction dated Tuesday, March 17th. The stock was sold at an average price of $156.59, for a total value of $389,595.92. Following the completion of the sale, the executive vice president directly owned 67,906 shares in the company, valued at $10,633,400.54. This trade represents a 3.53% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Over the last quarter, insiders sold 12,130 shares of company stock valued at $1,892,487. 17.20% of the stock is currently owned by corporate insiders.

Institutional Investors Weigh In On Zscaler

Large investors have recently made changes to their positions in the company. Binnacle Investments Inc bought a new stake in shares of Zscaler in the third quarter worth about $25,000. Root Financial Partners LLC bought a new stake in shares of Zscaler in the third quarter worth about $26,000. Picton Mahoney Asset Management bought a new stake in shares of Zscaler in the third quarter worth about $30,000. AlphaCentric Advisors LLC purchased a new position in Zscaler in the fourth quarter worth about $29,000. Finally, University of Texas Texas AM Investment Management Co. purchased a new position in Zscaler in the fourth quarter worth about $30,000. 46.45% of the stock is owned by institutional investors.

Zscaler Company Profile

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.