JPMorgan Revises Zscaler Price Target, Predicts 37% Growth

JPMorgan Chase & Co. has increased its price target for Zscaler (NASDAQ: ZS) stock from $351.00 to $354.00, indicating a potential upside of 37.35% from the stock’s current price. The firm has rated Zscaler as “overweight,” reflecting confidence in the company’s growth prospects. This adjustment, announced in a research report on October 2, 2023, is part of a broader trend among analysts who are bullish on Zscaler’s future.

Several other investment firms have also published their assessments of Zscaler recently. BTIG Research reaffirmed a “buy” rating with a target price of $365.00. Meanwhile, Wedbush raised its target from $330.00 to $350.00 and maintained an “outperform” rating. Evercore ISI increased their target from $290.00 to $320.00, also assigning an “outperform” rating. KeyCorp followed suit, raising its target from $345.00 to $350.00.

In contrast, Zacks Research modified its rating from “strong sell” to “hold,” reflecting a cautious approach. Overall, investment analysts show significant optimism about Zscaler, with one analyst issuing a “Strong Buy” rating, thirty-four giving a “Buy” rating, eight assigning a “Hold” rating, and one designating a “Sell” rating. According to data from MarketBeat.com, Zscaler has an average rating of “Moderate Buy” and an average target price of $316.82.

Recent Earnings Performance

Zscaler’s performance in its latest quarterly earnings report has further fueled investor interest. On November 25, 2023, the company announced earnings per share (EPS) of $0.96, exceeding the consensus estimate of $0.85 by $0.11. This positive performance comes alongside a reported revenue of $788.11 million, which surpassed analysts’ expectations of $773.86 million. The company experienced a 25.5% increase in revenue compared to the same quarter last year, a clear indication of robust growth.

Looking ahead, Zscaler has provided guidance for fiscal year 2026, projecting EPS between $3.780 and $3.820. For the second quarter of 2026, the guidance is set between $0.890 and $0.900. Analysts predict that Zscaler will post an EPS of -0.1 for the current year.

Insider Transactions and Institutional Interest

Recent insider transactions have also attracted attention. On September 17, 2023, insider Adam Geller sold 10,464 shares of Zscaler stock at an average price of $284.25, totaling approximately $2,974,392.00. Following this transaction, Geller retained 43,478 shares valued at around $12,358,621.50, representing a 19.40% decrease in ownership.

Additionally, Executive Vice President Raj Judge sold 4,524 shares on September 16, 2023, at an average price of $280.70, amounting to about $1,269,886.80. This sale reduced Judge’s holding to 73,832 shares, worth approximately $20,724,642.40. Over the past ninety days, insiders have sold a total of 43,084 shares, valued at around $12,446,825. Insiders currently own 18.10% of the company’s stock.

Institutional investors have also been active in adjusting their stakes in Zscaler. Notable transactions include Binnacle Investments Inc. acquiring a new stake worth approximately $25,000 during the third quarter. Tradewinds Capital Management LLC increased its stake by 145.7%, now owning 86 shares valued at $26,000. Other firms, such as Root Financial Partners LLC and McIlrath & Eck LLC, have also entered the market, further diversifying institutional ownership, which stands at 46.45%.

Zscaler operates as a global cloud security company, providing solutions for secure access to applications and services. Its offerings include Zscaler Internet Access and Zscaler Private Access, catering to a wide range of users and enterprises.

As the landscape for cybersecurity evolves, Zscaler’s growth trajectory and analysts’ positive outlook could signal continued interest from both institutional investors and individual stakeholders.