Zscaler (NASDAQ:ZS) Stock Price Down 2.4% – Should You Sell?

Zscaler, Inc. (NASDAQ:ZS) was down 2.4% on Tuesday . The company traded as low as $123.61 and last traded at $127.23. Approximately 3,805,695 shares were traded during mid-day trading, an increase of 5% from the average session volume of 3,608,208 shares. The stock had previously closed at $130.42.

Key Headlines Impacting Zscaler

Here are the key news stories impacting Zscaler this week:

• Positive Sentiment: Zscaler said it is expanding its zero-trust security offering for AI agents, with new tools aimed at monitoring and securing AI workflows. That supports the company’s growth narrative and could help long-term adoption. Zscaler introduces new zero trust tools to monitor and secure AI agent workflows
• Positive Sentiment: Commentary around AI security remains constructive, with one article arguing Zscaler is positioning itself to benefit as AI agents reshape cybersecurity demand. AI agents are changing cybersecurity forever. Zscaler is positioning itself to win big.
• Neutral Sentiment: Zscaler also drew attention for expanding Project AI-Guardian with major tech partners, which may improve ecosystem reach but is not an immediate financial catalyst. Zscaler (ZS) Adds Major Tech Partners to Project AI-Guardian
• Neutral Sentiment: Several insider sales were disclosed, including by the CEO, CFO, and a director, but the filings say the trades were tied to equity vesting and tax withholding rather than a change in outlook. CFO Kevin Rubin SEC filing
• Negative Sentiment: Pomerantz and Schall both announced investigations into possible securities-law issues at Zscaler, which can weigh on sentiment even though no wrongdoing has been proven. ZS Investors Have Opportunity to Join Zscaler, Inc. Fraud Investigation with the Schall Law Firm
• Negative Sentiment: Media commentary noted that SaaS names like Zscaler have fallen out of favor on Wall Street, reinforcing sector-level pressure on the shares. Jim Cramer Says SaaS Companies Like Zscaler “Have Fallen Viciously Out of Favor on Wall Street”

Wall Street Analyst Weigh In

ZS has been the topic of several recent analyst reports. Cantor Fitzgerald reiterated an “overweight” rating and set a $225.00 target price on shares of Zscaler in a research note on Wednesday, June 10th. Zacks Research upgraded Zscaler from a “strong sell” rating to a “hold” rating in a research note on Wednesday, May 27th. Stephens reaffirmed an “overweight” rating and set a $200.00 price target on shares of Zscaler in a report on Friday, June 12th. UBS Group dropped their price objective on Zscaler from $260.00 to $225.00 and set a “buy” rating on the stock in a research report on Wednesday, May 27th. Finally, Morgan Stanley reduced their price objective on Zscaler from $155.00 to $145.00 and set an “equal weight” rating for the company in a report on Wednesday, May 27th. Thirty-four investment 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 data from MarketBeat, Zscaler currently has a consensus rating of “Moderate Buy” and an average target price of $214.33.

Zscaler Stock Performance

The business’s 50-day moving average price is $141.85 and its 200-day moving average price is $174.22. The company has a debt-to-equity ratio of 0.72, a quick ratio of 1.86 and a current ratio of 1.86. The stock has a market cap of $20.19 billion, a P/E ratio of -260.10, a P/E/G ratio of 79.55 and a beta of 0.97.

Zscaler (NASDAQ:ZS) last posted its quarterly earnings data on Tuesday, May 26th. The company reported $1.08 EPS for the quarter, topping the consensus estimate of $1.01 by $0.07. Zscaler had a negative return on equity of 0.37% and a negative net margin of 2.44%.The firm had revenue of $850.48 million during the quarter, compared to analyst estimates of $835.14 million. During the same period in the prior year, the business posted $0.84 EPS. Zscaler’s revenue 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, sell-side analysts expect that Zscaler, Inc. will post 0.11 earnings per share for the current fiscal year.

Insider Buying and Selling

In other news, insider Adam Geller sold 1,940 shares of Zscaler stock in a transaction dated Tuesday, June 16th. The stock was sold at an average price of $126.43, for a total transaction of $245,274.20. Following the transaction, the insider directly owned 45,131 shares of the company’s stock, valued at $5,705,912.33. The trade was a 4.12% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, insider Robert Schlossman sold 3,146 shares of the business’s stock in a transaction that occurred on Tuesday, June 16th. The shares were sold at an average price of $126.43, for a total value of $397,748.78. Following the transaction, the insider owned 69,366 shares of the company’s stock, valued at approximately $8,769,943.38. This trade represents a 4.34% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The sale was made to cover tax withholding obligations related to the vesting of equity awards. In the last three months, insiders have sold 9,827 shares of company stock worth $1,242,263. Corporate insiders own 17.20% of the company’s stock.

Institutional Investors Weigh In On Zscaler

Institutional investors and hedge funds have recently added to or reduced their stakes in the company. Groupama Asset Managment raised its position in shares of Zscaler by 76,352.6% during the 3rd quarter. Groupama Asset Managment now owns 4,750,000 shares of the company’s stock valued at $1,423,385,000 after purchasing an additional 4,743,787 shares during the period. First Trust Advisors LP lifted its stake in shares of Zscaler by 36.2% during the 1st quarter. First Trust Advisors LP now owns 3,518,678 shares of the company’s stock valued at $493,635,000 after buying an additional 935,781 shares in the last quarter. Price T Rowe Associates Inc. MD boosted its holdings in Zscaler by 43.3% in the 4th quarter. Price T Rowe Associates Inc. MD now owns 2,572,358 shares of the company’s stock worth $578,576,000 after buying an additional 777,414 shares during the period. AQR Capital Management LLC increased its stake in Zscaler by 61.8% in the 3rd quarter. AQR Capital Management LLC now owns 1,941,571 shares of the company’s stock worth $576,083,000 after buying an additional 741,756 shares in the last quarter. Finally, Pictet Asset Management Holding SA increased its stake in Zscaler by 52.5% in the 1st quarter. Pictet Asset Management Holding SA now owns 1,920,540 shares of the company’s stock worth $269,285,000 after buying an additional 661,413 shares in the last quarter. Institutional investors own 46.45% of the company’s stock.

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.