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On Friday, Zscaler (NASDAQ:ZS) shares witnessed a positive adjustment from Cantor Fitzgerald, with the firm’s analyst Jonathan Ruykhaver increasing the 12-month price target to $290 from the previous $275, while reiterating an Overweight rating on the stock. Currently trading near its 52-week high of $259.40, InvestingPro analysis suggests the stock is trading above its Fair Value. The adjustment follows Zscaler’s robust financial performance in the third fiscal quarter of 2025 (F3Q25), where the company exceeded FactSet consensus estimates across several key financial metrics, including revenue, billings, earnings per share (EPS), and free cash flow.
The cybersecurity firm also upgraded its full-year fiscal 2025 forecasts, anticipating higher revenue, billings, operating profit, EPS, and free cash flow than previously expected. With impressive revenue growth of 25.46% and industry-leading gross profit margins of 77.45%, this upward revision reflects Zscaler’s strong financial health and growing market confidence in its business operations. InvestingPro subscribers can access 13 additional key insights about Zscaler’s financial health and growth prospects through exclusive ProTips.
Zscaler’s impressive top-line growth and the ability to secure large deals have been highlighted as evidence of the company’s effective execution. Now valued at $38.85 billion, the company has demonstrated strong momentum with a 39.19% year-to-date return. According to Cantor Fitzgerald, Zscaler has been navigating macroeconomic challenges successfully, attributing this resilience to the company’s continuous product innovation, enhancements in go-to-market strategies, and the robustness of its platform offerings.
The analyst’s comments underscore Zscaler’s momentum in the cybersecurity space, emphasizing that despite wider economic headwinds, the company has managed to deliver strong results. This performance is seen as a testament to Zscaler’s strategic initiatives and the inherent strength of its business model.
Investors and market watchers may view the revised price target and sustained Overweight rating as indicators of Zscaler’s solid position within the competitive landscape of cybersecurity solutions. The company’s focus on innovation and market expansion appears to be paying off, as reflected in its financial outcomes and the optimistic outlook from industry analysts.
In other recent news, Zscaler has reported strong third-quarter financial results, with billings growth of 25% year-over-year, surpassing the consensus estimate of 21%. The company also exceeded expectations in revenue and free cash flow, the latter being 14% above the street’s consensus. Zscaler’s emerging growth areas are approaching $1 billion in annual recurring revenue, and the company is set to acquire Red Canary for $675 million, which is expected to have a neutral impact on fiscal year 2026 operating margins.
Several analysts have updated their outlooks on Zscaler following these developments. Mizuho (NYSE:MFG) Securities raised its price target to $275 while maintaining a Neutral rating, citing Zscaler’s strong position in the market but noting competitive challenges. UBS increased its price target to $315 and reaffirmed a Buy rating, highlighting Zscaler’s robust sales execution and new customer acquisitions. TD Cowen also raised its target to $300, emphasizing the company’s resilience and customer expansion.
BMO Capital Markets adjusted its price target to $295, maintaining an Outperform rating, and noted Zscaler’s strong performance and potential for securing larger deals. Wolfe Research lifted its target to $310, keeping an Outperform rating, and highlighted Zscaler’s impressive financial metrics and potential for future growth. These analyst updates reflect a generally positive outlook on Zscaler’s strategic initiatives and financial performance.
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