Zscaler Inc. (NASDAQ:ZS) shares are trading higher Monday on what appears to be continued momentum after the company posted better-than-expected fiscal third-quarter earnings and raised its full-year guidance last week.
What To Know: The cybersecurity firm reported adjusted earnings of 84 cents per share, beating analyst estimates of 75 cents per share and revenue of $678 million, which topped consensus forecasts of $666.86 million.
The results were driven by demand for Zscaler’s Zero Trust Exchange platform and increased customer adoption across its portfolio. Calculated billings climbed 26% year-over-year to $785 million, exceeding expectations. Annual recurring revenue (ARR) also grew 23% year-over-year to $2.9 billion.
Despite the positive results, Piper Sandler downgraded the stock to Neutral from Overweight, citing valuation concerns and potential risks tied to Zscaler’s recent Red Canary acquisition and federal sector uncertainty. Still, the firm raised its price target from $235 to $260.
Other analysts were more bullish. RBC, KeyBanc, Needham and Rosenblatt all increased their price targets, with Rosenblatt pushing its forecast to $315. Analysts highlighted Zscaler’s strong execution, growing momentum in key product areas like Zero Trust and AI-driven security and improving sales productivity. Several firms also noted the company did not report any negative impact from current tariffs, a positive sign in the current macro environment. Positive analyst changes continue to roll in this week with Canaccord Genuity lifting its target from $230 to $305.
Zscaler's management raised full-year 2025 revenue guidance to a range of $2.659 billion to $2.661 billion, slightly above analyst estimates. Full-year adjusted earnings are now expected to be between $3.18 and $3.19 per share, up from prior forecasts and well ahead of the Street’s $3.07 estimate.
ZS Price Action: Zscaler shares were up 5.89% at $291.94 at the time of writing. Zscaler shares are now up more than 61% year-to-date. The stock climbed to new 52-week highs on Monday, according to Benzinga Pro.
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