Zscaler Inc reported a first-quarter revenue of $788.1 million, a 26% increase year-over-year, surpassing analysts' expectations. However, the company raised its full-year revenue forecast to $3.28 billion, which was less than anticipated, leading to a decline in stock price by over 7% in after-hours trading.
Despite the strong quarterly performance, the market reacted negatively to the modest increase in revenue guidance. Investors were expecting a more substantial upward revision given the company's robust growth in cloud and AI security solutions.
Zscaler's stock has seen significant gains this year, rising nearly 61%, but the current market sentiment reflects concerns over future growth projections. The company's focus on AI security and Zero Trust initiatives remains strong, but the cautious outlook has overshadowed its recent successes.
Wall Street analysts forecast ZS stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for ZS is 325.62 USD with a low forecast of 260.00 USD and a high forecast of 390.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
30 Analyst Rating
Wall Street analysts forecast ZS stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for ZS is 325.62 USD with a low forecast of 260.00 USD and a high forecast of 390.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
24 Buy
6 Hold
0 Sell
Strong Buy
Current: 200.630
Low
260.00
Averages
325.62
High
390.00
Current: 200.630
Low
260.00
Averages
325.62
High
390.00
RBC Capital
Matthew Hedberg
Outperform
to
Outperform
downgrade
$366 -> $290
2026-01-05
Reason
RBC Capital
Matthew Hedberg
Price Target
$366 -> $290
AI Analysis
2026-01-05
downgrade
Outperform
to
Outperform
Reason
RBC Capital analyst Matthew Hedberg lowered the firm's price target on Zscaler to $290 from $366 and keeps an Outperform rating on the shares. 2026 is likely to be a year when AI tailwinds become more evident for companies well positioned for enterprise AI adoption, while less prepared peers may remain pressured by the "AI is the death of software" narrative, the analyst tells investors in a research note. Enterprise spending appears to be stabilizing and improving in select areas, with GenAI driving innovation even as management teams remain conservative in early 2026 guidance, the firm says.
Piper Sandler
Neutral
downgrade
$280 -> $260
2026-01-05
Reason
Piper Sandler
Price Target
$280 -> $260
2026-01-05
downgrade
Neutral
Reason
Piper Sandler lowered the firm's price target on Zscaler to $260 from $280 and keeps a Neutral rating on the shares. The firm says 2025 proved to be a tough year for its Security & Infrastructure Software coverage, with the average name showing negative performance and only four names outperforming the NASDAQ. Piper is cautiously optimistic for a better year in 2026, with many names entering the year at interesting valuation levels setup well to be longer-term GenAI winners, despite monetization at the software layer not yet occurring at scale.
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Morgan Stanley
Overweight
downgrade
$335 -> $305
2025-12-18
Reason
Morgan Stanley
Price Target
$335 -> $305
2025-12-18
downgrade
Overweight
Reason
Morgan Stanley lowered the firm's price target on Zscaler to $305 from $335 and keeps an Overweight rating on the shares. Cybersecurity names were largely flat on the year, with platforms being up about 30%, on average, and the rest of the space being down about 12%, the analyst tells investors. The firm continues to see platforms as the "easiest way to play cyber" and expects them to continue to outperform, but believes other opportunities remain, the analyst tells investors in a year-ahead note for the group.
Mizuho
Neutral
to
Outperform
upgrade
$310
2025-12-16
Reason
Mizuho
Price Target
$310
2025-12-16
upgrade
Neutral
to
Outperform
Reason
Mizuho upgraded Zscaler to Outperform from Neutral with an unchanged price target of $310. The firm cites valuation for the upgrade, saying the shares are now "too attractive to ignore." Zscaler has sold off despite reporting a "very solid" fiscal Q1 report, the analyst tells investors in a research note. Mizuho is confident that Zscaler remains "very well-positioned" within zero trust. With the stock down 31% since the end of October, investors "are now being very well-compensated for the obfuscation," the analyst tells investors in a research note.
About ZS
Zscaler, Inc. is a cloud security company. The Company has developed a platform incorporating core security functionalities needed to enable fast and secure access to cloud resources based on identity, context and an organization’s policies. Its Zscaler Zero Trust Exchange platform protects thousands of customers from cyberattacks and data loss by securely connecting users, devices, and applications in any location. Its solution is a purpose-built, multi-tenant, distributed cloud platform that incorporates the security functionality needed to enable users, applications, and devices to safely and efficiently utilize authorized applications and services based on an organization’s business policies. It delivers its solutions using a software-as-a-service (SaaS) business model and sells subscriptions to customers to access its cloud platform, together with related support services. It offers a security platform that combines its platform with automated security operations.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
