Zscaler's $410M Volume Ranks 262nd as Analyst Upgrades Clash with 11% Weekly Decline

Market Snapshot

On November 19, 2025, Zscaler (ZS) traded with a daily volume of $410 million, ranking 262nd among stocks by trading activity. The stock closed 0.44% lower at $294.92, extending a week-long decline of nearly 11%. Despite recent analyst upgrades, the share price remains below its 52-week high of $336.99 and trades at a price-to-earnings ratio of -1,092.30, reflecting ongoing profitability challenges. The 50-day moving average of $305.60 and 200-day moving average of $289.28 highlight mixed technical signals, with the stock currently trading closer to its shorter-term support level.

Key Drivers

The stock’s recent volatility has been shaped by a surge in analyst optimism, strategic acquisitions, and mixed institutional investor activity. Over the past two weeks, multiple brokerages have raised price targets for Zscaler, signaling confidence in its long-term growth trajectory. Rosenblatt Securities led the trend on November 18, lifting its price target to $365 from $330, a 10.61% increase, while maintaining a “Buy” rating. This followed similar upgrades from Mizuho, Morgan Stanley, and Barclays, with price targets ranging from $325 to $350. The cumulative effect of these upgrades has pushed the average 12-month price target to $328.98, implying an 11.55% upside from current levels. Analysts cited Zscaler’s expanding market share in cloud-native cybersecurity, particularly its Z-Flex platform, as a key growth catalyst.

Strategic initiatives have further bolstered investor sentiment. Zscaler’s acquisition of AI security firm SPLX in late October added capabilities in AI asset discovery and governance, positioning the company to capitalize on the Secure Access Service Edge (SASE) market. Analysts at Cantor Fitzgerald and RBC Capital highlighted these moves as critical to long-term differentiation, with Cantor raising its price target to $365 and RBC increasing it to $366. However, the stock’s recent underperformance suggests market skepticism about near-term execution risks. TD Cowen noted that while Zscaler’s 23.31% revenue growth over the past year and 76.99% gross margins are strong, the company’s shift from billings to Annual Recurring Revenue (ARR) as a growth metric could introduce volatility.

Institutional investor activity has also been mixed. While hedge funds like GGM Financials LLC and Focus Partners Wealth increased their stakes in Q1 2026, insider sales in September and October raised concerns. CEO Jagtar Singh Chaudhry sold 2,865 shares, and other insiders collectively offloaded $12.45 million worth of stock over the past quarter. This contrasts with the 46.45% institutional ownership stake, which remains relatively stable. The divergence between institutional confidence and insider actions underscores the market’s cautious stance, despite the analyst consensus of “Outperform” from 47 brokerage firms.

Financial performance data has provided both validation and caution. Zscaler reported Q2 2026 results in September, beating earnings estimates by $0.09 per share and achieving $719.23 million in revenue, a 21.3% year-over-year increase. However, the company’s net margin of -1.55% and return on equity of -0.47% highlight ongoing profitability struggles. Analysts remain optimistic about future margins, with TD Cowen projecting a compound annual growth rate of 18% in ARR to reach $5 billion by 2028. Nevertheless, the recent 11% weekly decline in share price suggests investors are pricing in near-term risks, including macroeconomic uncertainty and competitive pressures in the cybersecurity sector.

The broader market context also plays a role. Zscaler’s beta of 1.06 indicates higher volatility than the S&P 500, amplifying exposure to market downturns. Recent analyst warnings about the stock’s sensitivity to interest rate movements and macroeconomic cycles have added to caution. While the “Moderate Buy” consensus from 42 analysts reflects optimism, the presence of a single “Sell” rating from Weiss Ratings and a “Hold” from Guggenheim highlights lingering skepticism. This divergence underscores the stock’s polarized valuation, with some analysts viewing the $294.92 price as a discounted entry point and others concerned about stretched multiples.

In summary, Zscaler’s stock performance reflects a tug-of-war between strong analyst sentiment and mixed operational and market signals. While strategic moves like the SPLX acquisition and platform innovations in AI security are seen as long-term strengths, near-term profitability challenges and insider sales temper enthusiasm. The coming weeks will be critical as the company reports Q1 2026 earnings on November 25, with analysts like TD Cowen and RBC Capital expecting “solid” results to validate the upgraded price targets.