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Investing.com - TD Cowen has reiterated its Buy rating and $330.00 price target on Zscaler (NASDAQ:ZS) ahead of the cybersecurity company’s upcoming first-quarter fiscal 2026 results, scheduled for November 25. This aligns with the broader analyst sentiment, as InvestingPro data shows a consensus recommendation of 1.69 (Buy), with price targets ranging from $215 to $390.
The research firm expects Zscaler to report "solid" first-quarter results, driven by large customer momentum and increasing demand for artificial intelligence solutions. TD Cowen noted that the company’s Z-Flex offering is helping drive enterprise adoption. This optimism is supported by Zscaler’s impressive 23.31% revenue growth over the last twelve months and gross profit margins of 76.99%.
Zscaler is accelerating platform innovations across three growth vectors: AI Security, Zero Trust, and Data Security, according to the analyst note. TD Cowen also believes that market commentary from hybrid providers like Cloudflare, Check Point Software, and Fortinet, along with NetSkope’s IPO, will reflect positively on Zscaler. Despite these positive catalysts, InvestingPro data reveals the stock has taken a significant hit, falling nearly 11% over the past week, potentially creating an entry opportunity before earnings.
The cybersecurity firm has been shifting its focus from billings to Annual Recurring Revenue (ARR) as its primary growth metric. TD Cowen believes Zscaler is positioned to achieve its targeted ARR of $5 billion by fiscal year 2028, implying a compound annual growth rate of approximately 18%. This growth trajectory appears achievable given the company’s historical 5-year revenue CAGR of 44%.
Zscaler is scheduled to report its first-quarter fiscal 2026 results after market close on November 25. TD Cowen’s $330 price target represents approximately 13 times the firm’s fiscal year 2027 estimated enterprise value to revenue ratio. According to InvestingPro, 21 analysts have revised their earnings upwards for the upcoming period, and the company is expected to be profitable this year despite not being profitable over the last twelve months. For deeper insights into Zscaler’s valuation and growth prospects, check out the comprehensive Pro Research Report available exclusively for subscribers.
In other recent news, Zscaler has announced the acquisition of AI security firm SPLX, enhancing its Zero Trust Exchange platform with new capabilities for securing artificial intelligence systems. This acquisition aims to bolster Zscaler’s offerings by integrating AI asset discovery, automated red teaming, and governance features. Ahead of its fiscal first-quarter 2026 earnings report, Cantor Fitzgerald raised its price target for Zscaler to $365, citing strong prospects in the Secure Access Service Edge (SASE) market and synergies from recent investments, including the SPLX acquisition. Meanwhile, Berenberg has initiated coverage on Zscaler with a Buy rating and a price target of $400, highlighting the company’s strategic position in the zero trust and cloud security sectors.
RBC Capital also increased its price target for Zscaler to $350, maintaining an Outperform rating and expressing confidence in the company’s growth potential. Citizens kept its Market Outperform rating with a $355 target, noting the company’s potential in the cyber-physical systems market. These developments reflect a growing consensus among analysts about Zscaler’s opportunities in emerging security markets. The company’s strategic acquisitions and focus on AI security are seen as pivotal to its future growth. Investors are closely watching how these initiatives will translate into financial performance in upcoming quarters.
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