Key Stats for Zscaler Stock
- Past week’s performance: -12.3%
- 52-week range: $128 to $337
- Valuation model target price: $199
- Implied upside: 49.3% over 2.3 years
Value your favorite stocks like Zscaler with 5 years of analysts’ forecasts using TIKR’s new Valuation Model (It’s free) >>>
What Happened?
Zscaler (ZS) stock fell 12.3% this week, and the biggest driver was a fresh selloff across cybersecurity names. Reuters said cyber stocks slid on March 27 after reports about Anthropic’s new advanced AI model raised fears about faster-moving cyber threats and new competitive pressure across the sector. Zscaler was hit along with peers, so this looked like a sector move more than a company-specific breakdown.
The stock had already been fragile before Friday’s drop. Reuters reported software stocks were among the market’s laggards on March 24 as broader weakness hit growth names, and that left little support for high-multiple cybersecurity stocks. When sentiment turned lower again on AI-related headlines, Zscaler shares fell harder because the stock had already been under pressure in 2026.
There was also no major positive catalyst this week to offset that pressure. Reuters reported insider sales by Chief Product Officer Adam Geller and director James Beer on March 20, while the company’s recent product announcements were more strategic than near-term financial events.
Zscaler did announce a forthcoming Canada deployment for data sovereignty on March 12, which expands its local-control offering for customers with regulatory needs, but that type of update usually supports the long-term story more than the next quarter.
The last real operating reset came after earnings in late February. Zscaler reported Q2 revenue of $815.8 million, up 26%, and adjusted EPS of $1.01, ahead of consensus, but Reuters also said the company posted a wider quarterly loss as spending rose. That combination helps explain the stock’s behavior now: investors still like the revenue growth, but they are less willing to ignore higher spending and a weaker margin profile.
See analysts’ growth forecasts and price targets for Zscaler (It’s free) >>>
Is Zscaler Stock Undervalued?
Under valuation model assumptions realized through 12/31/28, the stock is modeled using:
- Revenue growth (CAGR): 21%
- Operating Margins: 23.6%
- Exit P/E Multiple: 31.5x
Based on these inputs, the model estimates a target price of $199, implying 49.3% total upside from the current share price and a 18.6% annualized return over the next 2.3 years.
Those assumptions start with a business that is still growing quickly. Revenue rose 23.3% in fiscal 2025 to $2.67 billion, and LTM revenue reached $3.00 billion. Gross margin stayed high at 76.6%, which shows the core cloud-security platform still has strong software economics even as growth slows from earlier years.
The harder part is profitability. Zscaler’s LTM EBIT margin is negative 4.4%, and Reuters said the latest quarterly loss widened because sales, marketing, and R&D spending increased in a competitive market. That means the valuation case depends on the company growing into its cost base rather than already proving durable GAAP operating leverage.
There are still balance-sheet strengths behind the story. Zscaler ended January with about $3.5 billion of cash, cash equivalents, and short-term investments, and it still had negative net debt on an LTM basis. That gives the company room to invest in AI security, acquisitions, and go-to-market expansion without balance-sheet stress.
Valuation is where the debate gets sharper. The stock trades at about 5.45x NTM revenue and 20.25x NTM EBITDA, while the Street target price mean is $233.70 even after the drawdown. So Zscaler looks cheaper than it did at its highs, but the market is still pricing in strong growth and much better future margins than the company delivers today.
What’s Driving the Zscaler Stock Going Forward?
The next major catalyst is fiscal Q3 results, which are expected on May 29. After Q2, Zscaler raised its fiscal 2026 ARR growth guidance to 24%, and management said demand remains strong across AI Security, Zero Trust Everywhere, and Data Security. Investors now need to see whether that demand converts into sustained billings, ARR, and better operating leverage.
Management is also leaning hard into the AI security story. In the Q2 release, CEO Jay Chaudhry said Zscaler is “the cybersecurity platform for the AI age,” and said organizations adopting AI are turning to the company for security. He also said Zscaler continues to see robust demand across its three growth pillars, which matters because AI security is becoming one of the market’s main reasons to own the stock.
Partnerships and product expansion could also shape the next move. Zscaler’s Singtel Singapore partnership is aimed at bringing Zero Trust cellular security to IoT and OT devices across Southeast Asia, and the Canada data sovereignty deployment broadens its appeal to customers with local compliance requirements. Those initiatives will not change revenue overnight, but they do expand the platform into more regulated and infrastructure-heavy use cases.
The broader sector backdrop may matter just as much as company execution. If AI-related cyber fears keep rattling the group, Zscaler can stay volatile even if fundamentals hold up. But if the market starts rewarding vendors that can secure AI agents, connected devices, and sovereign data environments, Zscaler has several current products and partnerships tied directly to those themes.
Estimate a company’s fair value instantly (Free with TIKR) >>>
Should You Invest in Zscaler?
The only way to really know is to look at the numbers yourself. TIKR gives you free access to the same institutional-quality financial data that professional analysts use to answer exactly that question.
Pull up ZS, and you’ll see years of historical financials, what Wall Street analysts expect for revenue and earnings in the quarters ahead, how valuation multiples have moved over time, and whether price targets are trending up or down.
You can build a free watchlist to track ZS alongside every other stock on your radar. No credit card required. Just the data you need to decide for yourself.
Analyze Zscaler stock on TIKR Free→
Looking for New Opportunities?
- See what stocks billionaire investors are buying so you can follow the smart money.
- Analyze stocks in as little as 5 minutes with TIKR’s all-in-one, easy-to-use platform.
- The more rocks you overturn… the more opportunities you’ll uncover. Search 100K+ global stocks, global top investor holdings, and more with TIKR.
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!
