Key Stats for Zscaler Stock
- Price Change: -0.97% (Daily) / -26.7% (Monthly)
- Current Price: ~$169
- Advanced Model Target: $366
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What Happened?
Shares of Zscaler, Inc. (ZS) fell another 1.0% to close near $169 on Friday, capping a brutal month where the stock has lost over 26% of its value.
The selloff is driven by a growing “AI Replacement” narrative, as investors fear that new autonomous agents from OpenAI and Anthropic could render traditional “seat-based” software licenses obsolete.
Additionally, compounding the fear was Zscaler’s own 2026 AI Threat Report, which revealed that enterprise AI usage has surged 91%.
This created a massive security gap that the market worries Zscaler may struggle to plug quickly enough.
However, the company is fighting back, announcing the acquisition of SquareX on Thursday to extend its Zero Trust protection directly into the browser, a critical move for the AI era.
Furthermore, analysts at Mizuho recently upgraded the stock, arguing that the selloff is overdone and that Zscaler’s “data advantage” makes it a winner, not a loser, in the AI revolution.
Conversely, bearish firms like Trefis have warned of a drop to $118, citing the stock’s still-high valuation multiples compared to slower-growth peers.
Investors are now looking ahead to the Q2 Earnings Report on February 26, hoping for a “beat and raise” that can arrest the slide.
With the stock trading at its most attractive entry point in years, the debate is whether this is a “falling knife” or a generational buying opportunity.
See analysts’ growth forecasts and price targets for Zscaler stock (It’s free!) >>>
Is Zscaler Undervalued Today?
The stock has rallied significantly over the last three months, leaving Wall Street cautious. Speaking at the Barclays Global Technology Conference, CFO Kevin Rubin addressed the spending environment directly.
He stated: “I think it’s fair to say this is still a challenged market… Customers are very mindful as to where they deploy capital.”
However, he emphasized that Zscaler offers a unique “cost arbitrage” that resonates even in tough times.
He explained: “One of the very powerful conversations… is the cost arbitrage… as you deploy more of the Zscaler platform, what costs are you able to remove from your environment?”
Management believes that by consolidating multiple point products (VPNs, firewalls) into one platform, they can save customers money while improving security, a winning pitch for 2026.
Read the full Zscaler Transcript on TIKR to see the Cost Savings Strategy >>>
According to TIKR’s Advanced Valuation Model, the market has completely decoupled price from value, creating a massive upside potential.
- Target Price: $366
- Current Price: ~$169
- Potential Upside: +116.0%
Valuation Model Deep Dive
The investment case for Zscaler relies on the belief that “Zero Trust” is the only viable security architecture for the AI age.
The model suggests that the current price reflects a “no-growth” scenario that ignores the company’s massive addressable market.
- The Fair Value Gap: At $169, the stock trades at less than half of its $366 target, implying 116% upside if sentiment stabilizes.
- The Growth Reality: The model forecasts a robust 23.3% Revenue growth rate, supported by the new AI security products and the SquareX integration.
- The Profitability Check: With Net Income Margins at 23.4% (LTM), Zscaler is proving it can balance high growth with real GAAP profitability, a rarity in the SaaS world.
If Zscaler can prove on February 26 that AI is a tailwind, not a headwind, the short squeeze back to $366 could be violent.
Conclusion: The most hated high-quality stock in tech. With a 116.0% upside potential to $366, Zscaler offers a daring “contrarian” bet for investors who believe the cybersecurity kingpin is here to stay.
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How Much Upside Does Zscaler Stock Have From Here?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
