Zscaler: Evercore ISI Group raises PT to $320, maintains Outperform rating.

Zscaler: Evercore ISI Group raises PT to $320, maintains Outperform rating.

Evercore ISI Group has raised its price target for Zscaler (NASDAQ:ZS) to $320, maintaining an Outperform rating. This upgrade follows a series of positive analyst reports and strong financial performance by the cybersecurity company. The new target reflects increased confidence in Zscaler's durable revenue growth trajectory and its strategic initiatives.

Zscaler's impressive quarterly results, including a 45.44% return over the past six months, have drawn significant attention from analysts. The company's total revenue exceeded estimates by approximately $13 million, while profitability per share surpassed expectations by $0.09. These results were driven by record operating margins and a 77.46% gross profit margin, according to InvestingPro data [1].

Evercore ISI cited Zscaler's core strategic initiatives—Zero Trust Everywhere, Data Security Everywhere, and Agentic Operations—as key drivers of accelerated annual recurring revenue (ARR) growth. The company's Z-Flex offering also emerged as a significant growth driver, generating $100 million in total contract value bookings during the quarter, representing a 50% quarter-over-quarter increase [1].

The new price target is based on a 15.4x enterprise value to calendar year 2026 estimated sales multiple, reflecting increased confidence in Zscaler's 22% year-over-year revenue growth trajectory. This trajectory is up from the firm's previous 20% estimate [1].

Zscaler's recent acquisition of Red Canary is also expected to contribute significantly to its revenue. The company's management projects a substantial contribution from this acquisition, adding approximately $90 million in revenue [1].

This upgrade comes amid a broader trend of positive analyst reports for Zscaler. Other firms, such as Rosenblatt, JPMorgan, and Stifel, have also raised their price targets and maintained or upgraded their ratings based on the company's performance [1].

References:
[1] https://www.investing.com/news/analyst-ratings/zscaler-stock-price-target-raised-to-330-from-315-at-rosenblatt-93CH-4221526
[2] https://finance.yahoo.com/news/elf-beauty-downgraded-zscaler-upgraded-134506548.html