Durable Goods (Jun F) -9.4% vs 9.3% Prior, Ex-Trans 0.2% vs 0.2%
On Friday, JMP Securities analyst Trevor Walsh reiterated a Market Outperform rating on Zscaler (NASDAQ:ZS) with a steady price target of $310.00. The target represents potential upside from the current price of $251.11, with the stock already showing impressive momentum, having gained over 39% year-to-date. Walsh praised the company for its consistent performance and growth, even in a challenging economic climate. Zscaler’s success, according to Walsh, is driven by its experienced management team, led by CEO and Co-Founder Mr. Chaudhry, and the strategic importance of its core product which necessitates C-level executive engagement.
Zscaler’s leadership team, including the Chief Revenue Officer (CRO) and Chief Marketing Officer (CMO), has been recognized for enhancing sales productivity and steering the company towards a future goal of $5 billion in Annual Recurring Revenue (ARR). The company’s Zero Trust security platform has seen multiple new logo wins, including a significant seven-figure deal with a Fortune 100 beverage company, positioning Zscaler as a differentiated player in the security market. According to InvestingPro data, this success is reflected in the company’s impressive 77.86% gross profit margin and robust 27.77% revenue growth.
The company’s financial health was highlighted, with Zscaler delivering a 23% revenue increase and an 18% free cash flow (FCF) margin in the third fiscal quarter of 2025, at a scale of over $2 billion in ARR. The firm’s expanding market leadership was also noted, with the platform now monitoring over half a trillion transactions daily, a significant leap from the 30 billion at the time of its Initial Public Offering (IPO).
Zscaler’s comprehensive approach to security, which includes Zero Trust architecture and expansions into cloud and AI security, has been identified as a key factor in its market leadership and growth trajectory. Walsh’s comments reflect confidence in Zscaler’s strategic direction and its ability to maintain high levels of growth and profitability. However, InvestingPro analysis suggests the stock is currently trading above its Fair Value, with 13 additional ProTips available to help investors make informed decisions about this $38.85 billion cybersecurity leader. Access the comprehensive Pro Research Report for deeper insights into Zscaler’s valuation and growth prospects.
In other recent news, Zscaler has reported impressive financial results for its fiscal third quarter of 2025, with billings reaching $784.5 million, marking a 24.9% year-over-year increase. The company’s revenue also rose by 23%, surpassing analysts’ projections. In response to these results, several firms have adjusted their outlooks on Zscaler. Stifel has raised its price target to $295, while BTIG increased it to $298, both maintaining a Buy rating. Evercore ISI also raised its target to $290, noting the company’s strong go-to-market strategy and demand environment. Additionally, BofA Securities increased its target to $285, highlighting Zscaler’s robust sales productivity and new product introductions. Morgan Stanley (NYSE:MS) lifted its price target to $280, citing better-than-expected performance but maintaining an Equalweight rating. Zscaler’s strategic moves, including the appointment of a new CFO and the acquisition of Red Canary, have drawn attention from analysts. Despite some conservative estimates for future quarters, analysts remain optimistic about Zscaler’s growth trajectory and market position.
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