Zscaler Stock Rises 3% Amid Analyst Upgrade, Beating S&P 500

Zscaler stock rose 3% on Thursday, beating the S&P 500's 0.8% gain. Analyst Almas Almaganbetov upgraded his rating to "buy" and raised his price target to $320 per share, citing strong Q4 performance, including 21% YoY revenue growth and 32% calculated billings growth. Almaganbetov believes the results demonstrate resilient demand for Zscaler's products and broad-based growth across its offerings.

Zscaler Inc. (NASDAQ: ZS) stock rose by 3% on Thursday, outperforming the S&P 500's 0.8% gain. The upward movement was driven by strong quarterly results and an upgrade in analyst ratings. Analyst Almas Almaganbetov at Truist Securities upgraded his rating to "buy" and raised his price target to $320 per share [1].

The positive performance was largely attributed to Zscaler's Q4 results, which included 21% year-over-year (YoY) revenue growth and 32% calculated billings growth. These figures demonstrate resilient demand for Zscaler's products and broad-based growth across its offerings. The company's strong gross margins, reaching 76.88%, and impressive revenue growth of 23.31% over the last twelve months, further underscore its financial health [2].

In addition to the revenue and billings growth, Zscaler's new Z-Flex licensing model introduced less than two quarters ago has been highlighted as a potential growth driver for fiscal year 2026. The program, operating as an annual commitment subscription rather than a consumption model or enterprise license agreement, generated over $100 million in total contract value bookings in the fourth fiscal quarter, representing a 50% quarter-over-quarter increase [2].

The company's go-to-market operations also showed improvements, with lower attrition in fiscal year 2025 and fourth-quarter productivity reaching its highest level in two years. These operational efficiencies suggest that Zscaler is well-positioned to continue its growth trajectory [2].

Despite the positive news, Zscaler reported an earnings per share (EPS) of -$0.11 in its fourth-quarter 2025 earnings, significantly missing the anticipated $0.80, marking a surprise of -113.75%. However, the company managed to surpass revenue forecasts, reporting $719 million compared to the expected $706.95 million [1]. This revenue beat offers a silver lining to the earnings miss.

Several analysts have raised their price targets and maintained a "buy" rating on Zscaler's stock. Canaccord Genuity raised its price target to $340 from $320, while Robert W. Baird increased its target to $345. These upgrades reflect analysts' confidence in Zscaler's long-term platform strategy and its ability to capitalize on the growing demand for AI-driven security solutions [1, 3].

Zscaler's position in the cybersecurity sector, with a focus on zero-trust architecture and AI-driven threat detection, aligns with the projected growth of the global cybersecurity market, which is expected to reach $562.77 billion by 2032 [2]. This growth is driven by AI integration, regulatory pressures, and the proliferation of cloud-based threats.

In conclusion, Zscaler's strong Q4 performance, coupled with analyst upgrades and a robust market positioning, presents a compelling case for investors with a multi-year horizon. However, the company will need to navigate recent challenges and opportunities to maintain its growth trajectory.