TD Cowen lifts Zscaler stock price target to $300, maintains buy

On Friday, TD Cowen analyst Shaul Eyal updated the investment firm’s outlook on Zscaler (NASDAQ:ZS) stock, raising the price target to $300 from the previous $270, while reiterating a Buy rating. The adjustment followed Zscaler’s reported earnings, which surpassed expectations for the third fiscal quarter and led to an increased forecast for the fourth fiscal quarter. The stock has demonstrated remarkable momentum, delivering a 60.3% return over the past year and currently trading near its 52-week high of $259.40. According to InvestingPro analysis, the stock is currently trading above its Fair Value, with 13 additional key insights available to subscribers.

Eyal highlighted several factors contributing to Zscaler’s robust performance. The company has not observed any macroeconomic slowdown, indicating resilience in its business model amidst various market conditions. This resilience is reflected in the company’s impressive 27.77% revenue growth and robust gross profit margins of 77.86%. Additionally, Zscaler’s platform-centric approach has reportedly been well-received by large-scale customers, helping the company maintain its strong market position with a current market capitalization of $38.85 billion.

The analyst also noted the positive reception of Zscaler’s pricing scheme, known as ’z flex’, which seems to be favored by clients looking to scale up their engagement with the company. This aspect of the business model has been instrumental in fostering customer expansion.

Furthermore, the recent acquisition of Red Canary was mentioned as a strategic move that extends Zscaler’s reach into the security operations center (SOC) space, thereby accelerating the adoption of agentic AI. This acquisition is seen as a value-add that could enhance Zscaler’s product offerings and market positioning.

Eyal’s commentary concluded with a reiteration of the Buy rating and the increased price target, emphasizing the reasons for optimism around Zscaler’s ongoing performance and strategic initiatives. The raised price target of $300 reflects the analyst’s confidence in the company’s growth trajectory and its ability to continue outperforming in its sector.

In other recent news, Zscaler has reported impressive financial results, leading to positive adjustments from several analyst firms. The company exceeded expectations in its third-quarter fiscal year 2025 earnings, with a reported 24.9% year-over-year increase in billings to $784.5 million. This performance prompted BTIG to raise its price target to $298, while maintaining a Buy rating, and Wolfe Research increased its target to $310, also keeping an Outperform rating. BMO Capital Markets and Stifel both raised their price targets to $295, citing Zscaler’s strong execution and expanded billings forecast for fiscal year 2025.

JMP Securities maintained a price target of $310, recognizing Zscaler’s growth even in a challenging economic environment. Analysts have noted the company’s strategic moves, such as the acquisition of Red Canary, which enhances its security capabilities. The introduction of the Z-Flex purchasing vehicle and the appointment of a new Chief Financial Officer have also been highlighted as positive developments. Analysts from these firms express confidence in Zscaler’s ability to maintain its growth trajectory and market leadership in the cybersecurity space.

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