Zscaler Surges to 163rd in U.S. Trading Volume as Analysts Hike Targets but Stock Falls 2.97% on Widening Losses and Bearish Options

Market Snapshot

Zscaler (ZS) experienced a notable surge in trading activity on November 14, 2025, with a trading volume of $0.65 billion, a 79.98% increase from the previous day. This elevated volume ranked the stock 163rd in the U.S. market, reflecting heightened investor interest. However, the stock closed the day with a 2.97% decline, marking a disconnect between volume dynamics and price action. The mixed performance highlights short-term volatility amid broader analyst optimism for the cybersecurity SaaS provider.

Key Drivers

Analyst Optimism and Price Target Hikes

Zscaler has been the focus of multiple recent analyst upgrades, reinforcing a bullish consensus. Morgan Stanley raised its price target to $335 from $320 on November 13, while Barclays increased its target to $350—a 9.38% jump—from $320. Wedbush and RBC Capital also raised their targets by 6.06% and 4.48%, respectively, over the past two weeks. These adjustments reflect confidence in Zscaler’s strategic positioning in the cloud-native cybersecurity market and its ability to scale revenue. Peter Weed of Bernstein maintained a Buy rating with a $251 target, while the average analyst target stands at $330.59, signaling a collective expectation of long-term upside.

Revenue Growth Amid Persistent Losses

The company’s Q2 2025 earnings report provided a mixed picture. Revenue reached $719.23 million, a 20.4% year-over-year increase, demonstrating strong demand for its Zscaler Internet Access and Zscaler Private Access solutions. However, GAAP net losses widened to $17.58 million from $14.88 million in the same period of 2024. While the revenue growth underscores market traction, the expanding losses may have contributed to investor caution, particularly in a valuation-sensitive market environment. Analysts appear to prioritize long-term growth potential over near-term profitability, as evidenced by the continued “Strong Buy” consensus.

Institutional Investment and Market Sentiment

Institutional ownership of Zscaler has seen significant shifts, with funds like Vanguard’s Total Stock Market Index Fund and Invesco QQQ Trust increasing their holdings by double-digit percentages. Vanguard’s stake rose 56.93% quarter-over-quarter, while Invesco added 35.64% to its position. However, UBS Asset Management and American Century Companies reduced their allocations, reflecting divergent views on risk-rebalance strategies. Despite growing institutional support, the put/call ratio of 1.07 indicates a bearish options market, suggesting that retail and institutional investors are hedging against downside risks. This duality—robust analyst ratings versus cautious options activity—may explain the stock’s 2.97% decline despite positive fundamentals.

Sector Positioning and Competitive Dynamics

Zscaler’s dominance in the SaaS cybersecurity sector is a critical factor driving its valuation. As enterprises increasingly adopt cloud-native solutions, the firm’s dual-product model—Zscaler Internet Access for external application access and Zscaler Private Access for internal access—positions it to capture a broad market. Analysts highlighted the company’s first-mover advantage in a rapidly expanding sector, with projected annual revenue growth of 17.35% in 2025. However, non-GAAP EPS forecasts fell 7.98% from prior estimates, raising questions about the balance between growth investment and profitability. The competitive landscape remains intense, with peers like Datadog and Atlassian also receiving analyst attention, but Zscaler’s recurring revenue model and enterprise client base provide a durable moat.

Conclusion

Zscaler’s stock performance on November 14 reflects a complex interplay of factors: strong analyst endorsements, robust revenue growth, and institutional investment, counterbalanced by widening losses, a bearish options market, and competitive pressures. While the analyst community remains bullish, the 2.97% price decline underscores near-term valuation challenges. Investors appear to be weighing long-term growth potential against immediate profitability concerns, a dynamic that will likely shape the stock’s trajectory in the coming quarters.