Zscaler stock price target raised to $330 from $315 at Rosenblatt

Investing.com - Rosenblatt raised its price target on Zscaler (NASDAQ:ZS) to $330 from $315 on Wednesday, maintaining a Buy rating following the cybersecurity company’s quarterly results. According to InvestingPro data, the stock has shown impressive momentum with a 45.44% return over the past six months, though current analysis suggests the stock may be trading above its Fair Value.

The firm cited Zscaler’s strong performance that exceeded expectations across growth and profitability metrics. Total revenue beat Rosenblatt and Street estimates by approximately $13 million, while profitability per share topped the firm’s estimate by $0.09, driven by record quarterly operating margins. InvestingPro data reveals impressive gross profit margins of 77.46%, with analysts forecasting profitability this year. Get access to 10+ additional ProTips and comprehensive analysis with an InvestingPro subscription.

Zscaler’s core strategic initiatives—Zero Trust Everywhere, Data Security Everywhere, and Agentic Operations—are driving accelerated annual recurring revenue (ARR) growth, collectively surpassing $1 billion and outpacing the broader business. Total ARR exceeded the $3 billion milestone, growing 22% year-over-year.

The company’s Z-Flex offering emerged as a significant growth driver, generating $100 million in total contract value bookings during the quarter, representing a 50% quarter-over-quarter increase.

Rosenblatt’s new price target is based on a 15.4x enterprise value to calendar year 2026 estimated sales multiple, reflecting increased confidence in Zscaler’s durable 22% year-over-year revenue growth trajectory, up from the firm’s previous 20% estimate.

In other recent news, Zscaler’s fourth-quarter results have drawn significant attention, with multiple firms adjusting their stock price targets and ratings based on the company’s performance. Zscaler reported better-than-expected revenue, billings, profitability, and free cash flow. JPMorgan raised its price target to $351, maintaining an Overweight rating, while Stifel increased its target to $330, citing strong execution and demand for Zscaler’s expanding portfolio. Evercore ISI also raised its target to $320, noting the company’s impressive fiscal year 2026 guidance, which includes a projected 22.5% total revenue growth. UBS, however, lowered its price target to $350, maintaining a Buy rating but citing a conservative outlook for fiscal 2026 despite strong current metrics. BTIG reaffirmed its Buy rating and $365 price target after Zscaler’s billings surpassed expectations, with a 32% year-over-year growth. The company’s management projects a significant contribution from its recent Red Canary acquisition, which is expected to add approximately $90 million in revenue. These developments highlight Zscaler’s robust performance and the varying perspectives of analysts on its future growth trajectory.

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