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Investing.com - UBS raised its price target on Zscaler (NASDAQ:ZS) to $365 from $315 on Friday, while maintaining a Buy rating on the cybersecurity firm’s shares. The stock, which has delivered an impressive 70% return over the past six months, is currently trading near its 52-week high of $317.18.
The price target increase follows Zscaler’s fiscal third-quarter earnings report and the company’s Zenith Live user conference held earlier this month, which demonstrated strong platform momentum according to UBS.
The research firm expressed increased confidence in Zscaler’s growth trajectory for fiscal year 2026, supported by its new annual recurring revenue metrics and positive feedback from customer and partner conversations.
UBS adjusted its valuation multiple to 16x enterprise value to sales on its calendar year 2026 estimate, up from the previous 14x multiple, primarily to align with current market conditions.
The new price target is equivalent to 58 times UBS’s calendar year 2026 free cash flow estimate for the cloud security company.
In other recent news, Zscaler reported significant financial achievements, with a 23% revenue growth and an 18% free cash flow margin in the fiscal third quarter of 2025, supported by a $2 billion-plus annual recurring revenue scale. Analysts from JMP Securities have reiterated a Market Outperform rating, emphasizing Zscaler’s strong execution and growth potential amid challenging market conditions. JPMorgan increased its price target for Zscaler to $348, citing elevated demand and strategic growth initiatives such as Zero Trust Everywhere and Data Security Everywhere. Similarly, Wells Fargo (NYSE:WFC) upgraded Zscaler’s stock rating to Overweight, raising its price target to $385, based on the company’s growth outlook and potential to reach $5 billion in annual recurring revenue by fiscal year 2027. Cantor Fitzgerald also raised its price target to $340, driven by anticipated billings acceleration due to the adoption of cloud security and AI analytics. Meanwhile, Citizens JMP maintained its Market Outperform rating with a $310 price target after Zscaler’s Zenith Live 2025 event, highlighting the company’s strategic focus on cloud innovations. These developments reflect a strong confidence among analysts in Zscaler’s market position and growth trajectory in the cybersecurity sector.
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