Stifel raises Zscaler stock price target to $295, maintains Buy rating

On Friday, Stifel analysts adjusted their outlook on Zscaler stock (NASDAQ:ZS), increasing the price target to $295 from $270, while reiterating a Buy rating on the shares. The stock, currently trading near its 52-week high of $259.40, has delivered an impressive 60.3% return over the past year. According to InvestingPro analysis, the stock appears to be trading above its Fair Value, with RSI suggesting overbought territory. The firm acknowledged Zscaler’s impressive performance, noting the company’s third-quarter metrics surpassed expectations due to strong execution and sustained demand for its expanding zero trust security portfolio.

Zscaler’s financial guidance for the fiscal year 2025 has been revised upwards, reflecting better-than-anticipated results. The company, with a market capitalization of $38.85 billion, has increased its forecast for billings, revenue, operating income, and earnings per share (EPS). The company maintains robust gross profit margins of 77.86% and has achieved revenue growth of 27.77% in the last twelve months. Furthermore, Zscaler’s free cash flow (FCF) margin is also expected to improve. Want deeper insights? InvestingPro offers 12 additional investment tips and comprehensive financial analysis for Zscaler.

The analyst noted that Zscaler’s performance remained robust despite an uncertain macroeconomic environment. While the company is not yet profitable over the last twelve months, InvestingPro analysts predict profitability this year. The company’s leading security solutions are credited with enhancing organizational security postures, driving vendor consolidation, and reducing costs for customers. This resilience and success have been favorably viewed by Stifel.

Additionally, Zscaler’s recent corporate developments have drawn attention. The company appointed a new Chief Financial Officer (CFO) and introduced the Z-Flex purchasing vehicle. Moreover, Zscaler’s acquisition of Red Canary, a move that expands its managed detection and response (MDR) and security operations center (SOC) capabilities, is poised to be a focal point at the upcoming Zenith Live user conference.

Stifel’s analyst concluded by emphasizing Zscaler’s continued success from various perspectives, including the growing adoption of its product portfolio, go-to-market (GTM) productivity improvements, and the potential in securing artificial intelligence. The firm’s positive outlook on Zscaler is based on these ongoing developments and the company’s strategic moves in the cybersecurity space.

In other recent news, Zscaler has reported strong fiscal third-quarter 2025 results, with billings reaching $784.5 million, marking a 24.9% year-over-year increase. This performance exceeded both BTIG’s estimate of $761.2 million and the consensus estimate of $759.7 million. Zscaler’s guidance for the fourth quarter implies billings of $1,142.6 million, reflecting a 25.4% year-over-year growth, aligning with street forecasts. In light of these results, several analyst firms have adjusted their price targets for Zscaler. BTIG raised its target to $298, maintaining a Buy rating, while Evercore ISI increased its target to $290, also maintaining an Outperform rating. Morgan Stanley (NYSE:MS) lifted its target to $280, maintaining an Equalweight rating, and BofA Securities raised its target to $285, reiterating a Buy rating. Bernstein also updated its target to $251, maintaining an Outperform rating. These adjustments come amid Zscaler’s continued growth and strategic initiatives, including the acquisition of Red Canary, expected to close in August. The company’s evolving product suite and sales strategies have contributed to its robust performance, despite some economic uncertainties.

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