Zscaler (NASDAQ:ZS) Stock Price Down 7.4% – Should You Sell?

Zscaler, Inc. (NASDAQ:ZS) shares dropped 7.4% during trading on Tuesday . The stock traded as low as $143.75 and last traded at $144.1190. Approximately 10,304,777 shares traded hands during trading, an increase of 71% from the average daily volume of 6,040,175 shares. The stock had previously closed at $155.71.

Zscaler News Summary

Here are the key news stories impacting Zscaler this week:

• Positive Sentiment: Guggenheim upgraded Zscaler to Buy and set a higher target, with multiple reports highlighting roughly 25%+ implied upside from Wall Street price targets. Why Is Zscaler (ZS) Stock Soaring Today
• Positive Sentiment: Technical traders are encouraged by Zscaler breaking above its 50-day moving average, which can signal improving short-term momentum. Zscaler (ZS) Recently Broke Out Above the 50-Day Moving Average
• Positive Sentiment: Analysts continue to point to strong earnings estimate revisions and improving sentiment around Zscaler’s AI and cybersecurity growth story. Wall Street Analysts Think Zscaler (ZS) Could Surge 25.28%
• Positive Sentiment: In the latest earnings call coverage, management highlighted strong adoption of its Zero Trust SASE platform, public-sector expansion, and AI-related demand tailwinds. 5 Insightful Analyst Questions From Zscaler’s Q1 Earnings Call
• Neutral Sentiment: There is also elevated investor attention and unusual options activity, suggesting traders are positioning for continued volatility rather than a clear long-term trend.
• Negative Sentiment: Law firms have launched shareholder investigations into possible securities-law issues, which could create overhang and keep some investors cautious.
• Negative Sentiment: The stock remains under pressure from a recent post-earnings selloff and concerns that growth expectations may still be demanding despite the rebound. Zscaler: Great Opportunity On The Post-Earnings Selloff

Wall Street Analysts Forecast Growth

ZS has been the topic of several research analyst reports. HC Wainwright raised shares of Zscaler from a “buy” rating to a “buy” rating in a research note on Monday, May 18th. Scotiabank reduced their price objective on shares of Zscaler from $190.00 to $175.00 and set a “sector outperform” rating on the stock in a research note on Wednesday, May 27th. Piper Sandler reduced their price objective on shares of Zscaler from $185.00 to $160.00 and set a “neutral” rating on the stock in a research note on Wednesday, May 27th. Sanford C. Bernstein reduced their price objective on shares of Zscaler from $228.00 to $224.00 and set an “outperform” rating on the stock in a research note on Wednesday, May 27th. Finally, Robert W. Baird reduced their price objective on shares of Zscaler from $265.00 to $230.00 and set an “outperform” rating on the stock in a research note on Wednesday, May 27th. Thirty-three analysts have rated the stock with a Buy rating, six have issued a Hold rating and one has given a Sell rating to the stock. According to MarketBeat, Zscaler has a consensus rating of “Moderate Buy” and a consensus target price of $216.03.

Zscaler Trading Down 7.4%

The stock has a market capitalization of $23.31 billion, a P/E ratio of -300.31 and a beta of 0.96. The company has a debt-to-equity ratio of 0.72, a current ratio of 1.86 and a quick ratio of 1.86. The business’s 50 day simple moving average is $144.37 and its 200-day simple moving average is $187.40.

Zscaler (NASDAQ:ZS) last announced its quarterly earnings data on Tuesday, May 26th. The company reported $1.08 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $1.01 by $0.07. Zscaler had a negative net margin of 2.44% and a negative return on equity of 0.37%. The firm had revenue of $850.48 million for the quarter, compared to analysts’ expectations of $835.14 million. During the same period last year, the firm earned $0.84 earnings per share. The business’s revenue for the quarter was up 25.4% on a year-over-year basis. Zscaler has set its Q4 2026 guidance at 1.080-1.090 EPS and its FY 2026 guidance at 4.100-4.110 EPS. As a group, analysts forecast that Zscaler, Inc. will post -0.03 EPS for the current year.

Insider Activity at Zscaler

In other news, CFO Kevin Rubin sold 1,682 shares of Zscaler stock in a transaction on Tuesday, March 17th. The shares were sold at an average price of $156.59, for a total transaction of $263,384.38. Following the transaction, the chief financial officer directly owned 46,479 shares of the company’s stock, valued at $7,278,146.61. This trade represents a 3.49% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available through this hyperlink. Also, insider Adam Geller sold 2,094 shares of Zscaler stock in a transaction on Wednesday, March 18th. The stock was sold at an average price of $153.53, for a total transaction of $321,491.82. Following the transaction, the insider directly owned 46,949 shares in the company, valued at approximately $7,208,079.97. This represents a 4.27% 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 owned by corporate insiders.

Hedge Funds Weigh In On Zscaler

Hedge funds and other institutional investors have recently made changes to their positions in the company. Binnacle Investments Inc bought a new position in shares of Zscaler during the third quarter worth $25,000. AlphaCentric Advisors LLC acquired a new stake in shares of Zscaler during the fourth quarter worth $29,000. Picton Mahoney Asset Management bought a new stake in Zscaler in the 3rd quarter valued at $30,000. University of Texas Texas AM Investment Management Co. acquired a new position in Zscaler in the 4th quarter worth $30,000. Finally, Mcguire Capital Advisors Inc. acquired a new position in Zscaler in the 4th quarter worth $32,000. 46.45% of the stock is owned by institutional investors.

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.