Zscaler's Stock Declines Amid Broader Market Weakness
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3d ago
0mins
Should l Buy ZS?
Source: Benzinga
Zscaler Inc. shares fell 5.39% to $209.00, hitting a 20-day low, as the Nasdaq-100 dropped 1.15% and the S&P 500 fell 0.54%.
The decline in Zscaler's stock is attributed to broad market weakness, as the overall tech sector faced selling pressure, impacting investor sentiment despite the company's recent launch of AI cybersecurity tools. The market's negative trend has overshadowed Zscaler's positive developments, leading to a significant drop in its stock price.
This movement suggests that while Zscaler is innovating in the cybersecurity space, external market conditions are currently influencing its stock performance, highlighting the challenges tech companies face in a volatile market.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy ZS?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on ZS
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
24 Buy
6 Hold
0 Sell
Strong Buy
Current: 169.390
Low
260.00
Averages
325.62
High
390.00
Current: 169.390
Low
260.00
Averages
325.62
High
390.00
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.
Zscaler Acquires SquareX to Enhance Security Capabilities
- Acquisition Enhances Security: Zscaler's acquisition of SquareX aims to bolster its zero trust security capabilities, allowing organizations to deploy lightweight browser extensions directly within standard browsers, thus eliminating the need for third-party enterprise browsers or full security agents, enhancing its competitive edge in the AI era.
- Major Deal Completion: Heidelberg Materials has agreed to acquire Maas Group's construction materials business in Australia for up to A$1.7 billion (approximately $1.19 billion), including a potential A$120 million cash payment linked to further post-completion milestones, thereby strengthening its position in the Australian market.
- Private Equity Acquisition: KKR has agreed to acquire private investment firm Arctos Partners in a transaction valued at $1.4 billion in initial consideration, plus potential additional equity of up to $550 million, which will enhance KKR's investment portfolio in the private equity market.
- Cash Transaction Acquisition: Texas Instruments has signed a definitive agreement to acquire Silicon Labs for $231.00 per share in an all-cash transaction, representing a total enterprise value of around $7.5 billion, which will further expand Texas Instruments' market share in the semiconductor industry.
See More
US Stocks Plunge as Tech Sector Leads Decline
- Tech Sector Decline: Qualcomm's (QCOM) forecast of weaker-than-expected Q2 revenue led to an over 8% drop in its stock, triggering a sell-off across the tech sector, with the Nasdaq 100 index hitting a 2.5-month low, indicating waning investor confidence in technology stocks.
- Weak Labor Market Signals: Challenger's report revealed a staggering 117.8% year-over-year increase in job cuts for January, totaling 108,435, the highest for January since 2009, while initial jobless claims rose by 22,000 to 231,000, highlighting vulnerabilities in the US labor market that could hinder economic recovery.
- Bitcoin Plunge: Bitcoin (^BTCUSD) plummeted over 12% to a 1.25-year low, reflecting deepening negative momentum in the cryptocurrency market, with approximately $2 billion flowing out of Bitcoin ETFs in the past month, signaling a decline in investor confidence.
- Earnings Season Impact: Despite 150 S&P 500 companies set to report earnings this week, market focus on economic data intensifies, with S&P 500 earnings expected to grow by 8.4% in Q4, yet overall market sentiment remains suppressed by recent economic weakness.
See More
Zscaler Acquires SquareX to Enhance Security
- Acquisition of SquareX: Zscaler announced the acquisition of SquareX to enhance its zero trust browser security solutions, further solidifying its market position in cybersecurity.
- Strategic Implications: This acquisition not only strengthens Zscaler's product portfolio but also boosts its competitiveness in the rapidly growing cybersecurity market, addressing the increasing demand for security solutions.
- Technology Integration: By integrating SquareX's technology, Zscaler aims to enhance user browser security experiences, thereby reducing potential cyberattack risks and safeguarding customer data.
- Market Outlook: As enterprises increasingly prioritize cybersecurity, this acquisition is expected to create new growth opportunities for Zscaler, further expanding its market share.
See More
Zscaler Launches AI Cybersecurity Tools, Stock Rises
- Stock Surge: Zscaler's shares rose 3.36% to $221.76 on Tuesday, reflecting strong market confidence in its newly launched AI-powered cybersecurity tools, indicating investor optimism about the company's growth potential.
- AI Security Threats: A report from Zscaler revealed that 100% of corporate AI systems studied had serious vulnerabilities, with most being breachable in as little as 16 minutes, highlighting the urgent need for companies to reassess their security strategies as they rapidly adopt AI tools.
- New Tool Launch: Zscaler's advanced cybersecurity solutions provide companies with a comprehensive view of their AI operations, including infrastructure, models, applications, and development operations, aimed at effectively addressing security threats in the AI era and enhancing market competitiveness.
- Market Demand: CEO Jay Chaudhry emphasized that business leaders are seeking comprehensive solutions rather than more point products, driving Zscaler's innovation in AI security and further solidifying its leadership position in the cybersecurity market.
See More
Intuit Shares Drop 3.2%, Worst Nasdaq 100 Performer
- Stock Decline: Intuit's shares fell 3.2% today, marking it as the worst performer in the Nasdaq 100, indicating market concerns regarding its future growth prospects.
- Poor Year-to-Date Performance: Year-to-date, Intuit has declined approximately 17.9%, highlighting the challenges the company faces in a competitive market environment, which may impact investor confidence.
- Market Dynamics: In contrast to Intuit, Atlassian's shares dropped 2.9% today, while Zscaler rose by 5.3%, reflecting varying market reactions to different tech companies, which could influence investor asset allocation strategies.
- Investor Sentiment: The ongoing decline of Intuit may prompt investors to reassess their positions in tech stocks, particularly as current economic conditions heighten focus on profitability and growth potential.
See More
Zscaler (NASDAQ: ZS) Expected to Achieve Profitability by 2027 with 46% Annual Growth Rate
- Approaching Breakeven: Zscaler reported a loss of $41 million in its most recent financial year, with analysts predicting a final loss in 2026 before turning a profit of $2.1 million in 2027, indicating a positive trend towards breakeven.
- Growth Rate Expectations: To achieve profitability by 2027, Zscaler must maintain an average annual growth rate of 46%, reflecting analysts' confidence in the company's future; however, slower growth could delay profitability.
- High Debt Risk: Zscaler's debt level is relatively high at 86% of equity, significantly exceeding the 40% threshold, necessitating stricter capital management and increasing investment risks.
- Market Focus: While Zscaler's growth potential is noteworthy, its current investment phase and high debt levels may affect investor confidence, necessitating close monitoring of future financial performance and market dynamics.
See More
Zscaler Acquires SquareX to Enhance Security Capabilities
- Acquisition Enhances Security: Zscaler's acquisition of SquareX aims to bolster its zero trust security capabilities, allowing organizations to deploy lightweight browser extensions directly within standard browsers, thus eliminating the need for third-party enterprise browsers or full security agents, enhancing its competitive edge in the AI era.
- Major Deal Completion: Heidelberg Materials has agreed to acquire Maas Group's construction materials business in Australia for up to A$1.7 billion (approximately $1.19 billion), including a potential A$120 million cash payment linked to further post-completion milestones, thereby strengthening its position in the Australian market.
- Private Equity Acquisition: KKR has agreed to acquire private investment firm Arctos Partners in a transaction valued at $1.4 billion in initial consideration, plus potential additional equity of up to $550 million, which will enhance KKR's investment portfolio in the private equity market.
- Cash Transaction Acquisition: Texas Instruments has signed a definitive agreement to acquire Silicon Labs for $231.00 per share in an all-cash transaction, representing a total enterprise value of around $7.5 billion, which will further expand Texas Instruments' market share in the semiconductor industry.
See More
US Stocks Plunge as Tech Sector Leads Decline
- Tech Sector Decline: Qualcomm's (QCOM) forecast of weaker-than-expected Q2 revenue led to an over 8% drop in its stock, triggering a sell-off across the tech sector, with the Nasdaq 100 index hitting a 2.5-month low, indicating waning investor confidence in technology stocks.
- Weak Labor Market Signals: Challenger's report revealed a staggering 117.8% year-over-year increase in job cuts for January, totaling 108,435, the highest for January since 2009, while initial jobless claims rose by 22,000 to 231,000, highlighting vulnerabilities in the US labor market that could hinder economic recovery.
- Bitcoin Plunge: Bitcoin (^BTCUSD) plummeted over 12% to a 1.25-year low, reflecting deepening negative momentum in the cryptocurrency market, with approximately $2 billion flowing out of Bitcoin ETFs in the past month, signaling a decline in investor confidence.
- Earnings Season Impact: Despite 150 S&P 500 companies set to report earnings this week, market focus on economic data intensifies, with S&P 500 earnings expected to grow by 8.4% in Q4, yet overall market sentiment remains suppressed by recent economic weakness.
See More
Zscaler Acquires SquareX to Enhance Security
- Acquisition of SquareX: Zscaler announced the acquisition of SquareX to enhance its zero trust browser security solutions, further solidifying its market position in cybersecurity.
- Strategic Implications: This acquisition not only strengthens Zscaler's product portfolio but also boosts its competitiveness in the rapidly growing cybersecurity market, addressing the increasing demand for security solutions.
- Technology Integration: By integrating SquareX's technology, Zscaler aims to enhance user browser security experiences, thereby reducing potential cyberattack risks and safeguarding customer data.
- Market Outlook: As enterprises increasingly prioritize cybersecurity, this acquisition is expected to create new growth opportunities for Zscaler, further expanding its market share.
See More
Zscaler Launches AI Cybersecurity Tools, Stock Rises
- Stock Surge: Zscaler's shares rose 3.36% to $221.76 on Tuesday, reflecting strong market confidence in its newly launched AI-powered cybersecurity tools, indicating investor optimism about the company's growth potential.
- AI Security Threats: A report from Zscaler revealed that 100% of corporate AI systems studied had serious vulnerabilities, with most being breachable in as little as 16 minutes, highlighting the urgent need for companies to reassess their security strategies as they rapidly adopt AI tools.
- New Tool Launch: Zscaler's advanced cybersecurity solutions provide companies with a comprehensive view of their AI operations, including infrastructure, models, applications, and development operations, aimed at effectively addressing security threats in the AI era and enhancing market competitiveness.
- Market Demand: CEO Jay Chaudhry emphasized that business leaders are seeking comprehensive solutions rather than more point products, driving Zscaler's innovation in AI security and further solidifying its leadership position in the cybersecurity market.
See More
Intuit Shares Drop 3.2%, Worst Nasdaq 100 Performer
- Stock Decline: Intuit's shares fell 3.2% today, marking it as the worst performer in the Nasdaq 100, indicating market concerns regarding its future growth prospects.
- Poor Year-to-Date Performance: Year-to-date, Intuit has declined approximately 17.9%, highlighting the challenges the company faces in a competitive market environment, which may impact investor confidence.
- Market Dynamics: In contrast to Intuit, Atlassian's shares dropped 2.9% today, while Zscaler rose by 5.3%, reflecting varying market reactions to different tech companies, which could influence investor asset allocation strategies.
- Investor Sentiment: The ongoing decline of Intuit may prompt investors to reassess their positions in tech stocks, particularly as current economic conditions heighten focus on profitability and growth potential.
See More
Zscaler (NASDAQ: ZS) Expected to Achieve Profitability by 2027 with 46% Annual Growth Rate
- Approaching Breakeven: Zscaler reported a loss of $41 million in its most recent financial year, with analysts predicting a final loss in 2026 before turning a profit of $2.1 million in 2027, indicating a positive trend towards breakeven.
- Growth Rate Expectations: To achieve profitability by 2027, Zscaler must maintain an average annual growth rate of 46%, reflecting analysts' confidence in the company's future; however, slower growth could delay profitability.
- High Debt Risk: Zscaler's debt level is relatively high at 86% of equity, significantly exceeding the 40% threshold, necessitating stricter capital management and increasing investment risks.
- Market Focus: While Zscaler's growth potential is noteworthy, its current investment phase and high debt levels may affect investor confidence, necessitating close monitoring of future financial performance and market dynamics.
See More
