Zscaler Initiated at Neutral with $275 Price Target by B. Riley Securities

B. Riley Securities initiated coverage on Zscaler with a Neutral rating, citing recent outperformance but advising investors to wait before buying. The firm set a $275 price target on the cybersecurity company.

B. Riley Securities has initiated coverage on Zscaler (NASDAQ:ZS), a leading cybersecurity company, with a Neutral rating. The firm cited Zscaler's recent outperformance but advised investors to wait before buying, setting a $275 price target on the stock [1].

Zscaler, known for its SaaS-based cloud cybersecurity services, has been recognized for its strong market position and impressive 25% year-over-year revenue growth. The company's proprietary technology platform is highlighted for its scalability and ability to perform multiple cybersecurity services. B. Riley also noted Zscaler's strong sales execution, which has attracted new accounts and expanded into its large installed base [2].

Despite these strengths, B. Riley pointed to an intense competitive landscape where larger platform providers leverage product breadth and global distribution, while emerging vendors remain agile with differentiated technology. The firm concluded that Zscaler stock, which has outperformed the broader cybersecurity sector recently, is fairly valued, trading at an earnings multiple approximately in line with comparable cybersecurity leaders [2].

In recent news, Zscaler has priced $1.5 billion in convertible senior notes due 2028, aimed at qualified institutional buyers. These zero-interest notes have a conversion rate set at 2.2752 shares per $1,000 principal amount, translating to a conversion price of approximately $439.52 per share. JMP Securities has reiterated its Market Outperform rating for Zscaler and raised its price target from $310 to $355, following investor meetings with key company figures. Cantor Fitzgerald has also maintained its Overweight rating with a $340.00 price target, citing strong early results from Zscaler’s new Z-Flex program [2].

References:
[1] https://seekingalpha.com/news/4489205-zscaler-initiated-at-neutral-following-its-recent-outperformance-b-riley
[2] https://www.investing.com/news/analyst-ratings/briley-initiates-zscaler-stock-coverage-with-neutral-rating-275-target-93CH-4210227