Zscaler (ZS) Surges 3.27% on Earnings Optimism and Analyst Upgrades—Is This the Start of a New Bull Run?

Summary
• Zscaler (ZS) trades at $318.00, up 3.27% intraday, hitting a 52-week high of $319.21
• Earnings estimates for FY2026 rose 32% in 30 days, with Q1 2026 EPS guidance at $0.85–0.86
• Analysts raised price targets (JPMorgan to $351, RBC to $335) but Zacks downgraded to 'Strong Sell'

Zscaler’s stock surged to a 52-week high amid a flurry of analyst upgrades and strong forward guidance. The cybersecurity leader’s shares traded between $308.00 and $319.21, driven by optimism over AI-driven security demand and revised earnings projections. However, conflicting signals from Zacks’ 'Strong Sell' rating and UBS’ price target cuts highlight a volatile path ahead.

Earnings Revisions and Analyst Upgrades Fuel Zscaler's Rally
Zscaler’s 3.27% intraday gain stems from a confluence of bullish and bearish catalysts. On the positive side, the company’s Q1 2026 EPS guidance of $0.85–0.86 (vs. $0.49 consensus) and FY2026 revenue projections of $3.92 billion (up 20% YoY) signaled robust growth. Analysts like JPMorgan and RBC raised price targets to $351 and $335, respectively, citing AI-powered zero-trust security demand. Meanwhile, Zacks’ downgrade to 'Strong Sell' and UBS’ cut to $350 highlighted valuation concerns after a 51% YTD rally. The stock’s surge also followed a $0.84 EPS miss in Q2, which analysts now view as a short-term blip amid long-term AI security tailwinds.

Cybersecurity Sector Gains Momentum as Zscaler Outperforms Peer CrowdStrike
Zscaler’s 3.27% gain outpaced CrowdStrike (CRWD), which rose 3.38% intraday. The cybersecurity sector, bolstered by Meta’s new scam-detection tools and rising AI-driven threats, saw ZS outperform due to its AI-centric product roadmap. While CRWD’s rally reflects broader sector strength, ZS’s earnings revisions and analyst upgrades position it as a momentum play within a defensive sector.

Options and ETFs for Zscaler's Volatile Rally: Key Plays for Bulls and Bears
• 200-day average: 250.94 (well below current price)
• RSI: 50.23 (neutral)
• MACD: 4.83 (bullish divergence from signal line at 5.41)
• Bollinger Bands: Price at 318.47 (upper band), 303.66 (middle), 288.85 (lower)

Zscaler’s technicals suggest a short-term bullish trend, with the 52-week high at $319.21 acting as a critical resistance. The stock’s 3.27% gain aligns with its 50.23 RSI reading, indicating no immediate overbought conditions. The MACD’s positive divergence and Bollinger Band positioning suggest continued upside potential, though the -1213.65 P/E ratio underscores valuation risks. For options, two contracts stand out:

• ZS20251031C315 (Call, $315 strike, 31-Oct expiration):
- IV: 37.71% (moderate)
- Leverage ratio: 32.80%
- Delta: 0.598 (moderate sensitivity)
- Theta: -1.204 (high time decay)
- Gamma: 0.0205 (strong price sensitivity)
- Turnover: 26,646 (high liquidity)
- Payoff at 5% upside (334.0): $19.00/share
This call offers a balance of leverage and liquidity, ideal for a bullish breakout above $319.21.

• ZS20251031C317.5 (Call, $317.5 strike, 31-Oct expiration):
- IV: 39.23% (moderate)
- Leverage ratio: 36.86%
- Delta: 0.545 (moderate sensitivity)
- Theta: -1.161 (high time decay)
- Gamma: 0.0202 (strong price sensitivity)
- Turnover: 37,291 (high liquidity)
- Payoff at 5% upside (334.0): $16.50/share
This contract provides higher leverage for a more aggressive play, with strong gamma to benefit from price acceleration.

Aggressive bulls may consider ZS20251031C315 into a bounce above $319.20.

Backtest Zscaler Stock Performance
I’ve completed an event-based back-test for Zscaler (ticker ZS.O) covering 1 Jan 2022 – 23 Oct 2025. The study buys at each close when ZS ends the day ≥ +3 % versus the prior close and tracks performance for 30 trading days.Key findings (high-lights)• 22 qualifying surge events were identified. • Average excess return (vs. holding the stock continuously) stayed negative through most of the 30-day window, dipping to about –3 % by day 30. • Win rates hover near or below 50 %; no day’s average excess return is statistically significant at the 95 % level. → Historically, chasing 3 %+ up-days in ZS has not delivered a persistent edge over simply holding.For full interactive details—including per-day P&L curve, cumulative alpha, and best/worst event drill-downs—see the embedded module below.Notes on assumptions & methodology 1. Price series: official daily close data retrieved for ZS.O (2022-01-01 → 2025-10-23). 2. Event definition: daily close change ≥ +3 %. (You can tighten or relax this threshold—let me know if you’d like variants.) 3. Trade logic: buy at close on event day, hold unhedged for up to 30 trading days, exit at each horizon to compute event returns; benchmark is ZS buy-and-hold. 4. No transaction costs or position sizing constraints were included; we can extend to include them if desired.Feel free to explore the interactive charts or let me know if you’d like to adjust parameters (e.g., add stop-loss rules, test other thresholds, compare to sector ETF, etc.).

Zscaler's Rally Faces Crossroads—Act Now on Earnings and Analyst Momentum
Zscaler’s 3.27% rally reflects a tug-of-war between earnings optimism and valuation skepticism. The stock’s 52-week high at $319.21 and strong options liquidity suggest a critical juncture: a break above this level could validate the bullish thesis, while a pullback to the 303.66 Bollinger middle band may test near-term resolve. Investors should monitor the 315.00 strike as a key support/resistance pivot. Meanwhile, CrowdStrike (CRWD)’s 3.38% gain highlights sector strength, but ZS’s analyst-driven momentum positions it as a top play. Watch for $319.20 breakout or a 303.66 breakdown to dictate next steps.