Fed’s "dot plot" seen projecting three rate cuts by the end of 2025 - Barclays
Investing.com - Freedom Capital Markets upgraded Zscaler (NASDAQ:ZS) from Hold to Buy and raised its price target to $320.00 from $280.00 following the company’s fourth-quarter performance. The stock has demonstrated remarkable momentum, delivering an 81% return over the past year and maintaining strong analyst support with a consensus Buy rating.
The cybersecurity firm exceeded both analyst expectations and its own guidance in the fourth quarter, demonstrating resilient demand for its security solutions across all key business areas, from Zero Trust platform expansion to data protection scaling and new AI-powered offerings. With impressive gross margins of 77% and revenue growth of 23%, the company maintains a "GOOD" financial health rating according to InvestingPro analysis.
Zscaler’s operating margin outperformed guidance due to stronger top-line momentum, despite experiencing temporary pressure on gross margin from one-time factors, according to the research firm.
The company provided fiscal year 2026 guidance that surpassed market expectations, emphasizing the strategic importance of customer expansion, solution consolidation, and integration of recent acquisitions.
Freedom Capital Markets has raised its FY2026 forecasts to incorporate growth momentum from the Red Canary acquisition and adjusted its long-term growth assumptions higher, supporting the rating upgrade and increased price target.
In other recent news, Zscaler Inc . reported its fourth-quarter 2025 earnings, which showed a significant miss in earnings per share (EPS) compared to analyst expectations. The company posted an EPS of -$0.11, falling short of the anticipated $0.80, resulting in a surprise of -113.75%. However, Zscaler exceeded revenue forecasts, reporting $719 million against the expected $706.95 million. Despite the earnings miss, Truist Securities reiterated its Buy rating on Zscaler with a price target of $350, highlighting confidence in the company’s long-term platform strategy and emerging business segments. Canaccord Genuity also maintained a Buy rating while raising its price target to $340, citing Zscaler’s strong technology moat and platform uptake. These developments reflect ongoing analyst confidence in Zscaler’s strategic direction despite recent earnings challenges.
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