Wells Fargo Analyst Reiterates Buy Rating on Zscaler Stock Amid Strong Market Position and Growth Potential

Wells Fargo analyst Andrew Nowinski has reiterated a Buy rating on Zscaler, citing strong market position and growth potential. The company is expected to report robust Q4 2025 results, driven by positive channel checks and leadership in the Zero Trust market. Nowinski forecasts ARR of $3.1 billion, surpassing consensus, and predicts $4 billion ARR for FY26, significantly higher than market consensus. He also expects strong billing performance and modestly expanding operational margin.

Zscaler, a leading provider of cloud security solutions, has expanded its partnership with Red Canary and CrowdStrike to enhance cloud security and streamline legacy endpoint migrations. This strategic move aims to deliver a multi-layered defense against threats, leveraging advanced security technologies to improve threat detection and response times. The collaboration is expected to facilitate the transition for customers moving from traditional endpoint security solutions to CrowdStrike's Falcon platform, integrated with Zscaler's Zero Trust Exchange and Red Canary’s AI-driven security operations [3].

The expanded partnership builds on Zscaler's strong market position and growth potential, as highlighted by Wells Fargo analyst Andrew Nowinski, who reiterated a Buy rating on Zscaler. Nowinski expects robust Q4 2025 results, driven by positive channel checks and leadership in the Zero Trust market. He forecasts an Annual Recurring Revenue (ARR) of $3.1 billion, surpassing consensus, and predicts $4 billion ARR for FY26, significantly higher than market consensus. Additionally, Nowinski anticipates strong billing performance and modestly expanding operational margins [4].

Zscaler's leadership in the Zero Trust Network Access (ZTNA) market is expected to continue growing, reaching $7.34 billion by 2025, with a Compound Annual Growth Rate (CAGR) of 17.4%. This growth is driven by the increasing adoption of remote work, cloud-based applications, and the evolving landscape of cyber threats. North America currently holds the largest market share, representing 47.4% of the global revenue [1].

The company's strategic partnerships and market leadership position are expected to drive its growth in the coming years. As the demand for secure access solutions continues to rise, Zscaler's ability to deliver advanced security technologies and streamline legacy migrations will be crucial for its success. The company's strong financial outlook and market position make it an attractive investment opportunity for financial professionals and investors.

References:

[1] https://www.kuppingercole.com/press-release/ztna-market-growth-predictions-2025
[2] https://www.tradingview.com/news/reuters.com,2025-08-20:newsml_NFC87wmbs:0-zero-dte-spx-and-es-traders-get-new-algo-q-algo-software-beta-2-launches/
[3] https://www.quiverquant.com/news/Zscaler+and+Red+Canary+Expand+Partnership+with+CrowdStrike+to+Enhance+Cloud+Security+Solutions
[4] Wells Fargo Analyst Andrew Nowinski's Buy rating on Zscaler