Zscaler Slides 1.03% Amid 450M Volume Drop to 213th in Active Stocks as Institutional Buys Clash with Insider Sales

Zscaler (ZS) closed August 8, 2025, with a 1.03% decline, trading at $296.72 as of market close. The stock recorded a daily trading volume of $450 million, a 47.96% drop from the previous day, ranking it 213th among the most actively traded stocks. Institutional ownership of Zscaler remains significant, with 46.45% of shares held by institutional investors and hedge funds. Goldman Sachs increased its stake by 23.4% in Q1, holding 1.97% of the company's shares valued at $604.83 million. Several other firms, including Alliancebernstein and Envestnet, also boosted their positions in Q4 2024, reflecting continued institutional confidence in the cybersecurity firm's growth prospects.

Analyst activity has highlighted diverging perspectives on Zscaler's valuation. Royal Bank of Canada and Susquehanna raised price targets to $304 and $320, respectively, while BNP Paribas upgraded to "outperform." Conversely, Roth Capital maintained a "neutral" stance. The stock currently carries a "Moderate Buy" consensus rating with an average price target of $296.82. Insider transactions, however, revealed recent sales by executives and directors, including a 4.61% reduction by Robert Schlossman and a 42.76% cut in shares by Andrew William Fraser Brown, totaling $58.75 million in insider sales over 90 days. These moves may signal cautious positioning among company insiders despite broader institutional support.

A recent earnings report showed Zscaler posting $0.84 per share in Q2 2025, exceeding estimates by $0.08, with revenue rising 22.6% year-over-year to $678 million. However, the company continues to operate at a net loss, with a negative net margin of 1.52% and a P/E ratio of -1,112.77. The stock's 52-week range of $153.45 to $318.46 underscores its volatility, while a beta of 1.06 indicates moderate sensitivity to market movements. Analysts project a challenging near-term earnings outlook, forecasting -0.1 EPS for the current year.

A liquidity-based trading strategy involving the top 500 volume-driven stocks outperformed the benchmark by 137.53% from 2022 to 2025. This highlights the impact of liquidity concentration on short-term performance, particularly in volatile sectors like cybersecurity. High-liquidity stocks, including Zscaler, often exhibit amplified price swings even with declining volume, as observed in recent trading patterns. Such strategies emphasize the importance of market depth in sustaining momentum for short-holding periods.