Cyber criminals have increasing capabilities with the availability of agentic AI.
In the closing of the recent trading day, Zscaler (ZS) stood at $220.79, denoting a -3.44% move from the preceding trading day.
Zscaler is rated HOLD after a recent price surge erased its prior risk/reward asymmetry, despite strong business momentum and sector-leading value metrics. ZS's FY27 guidance for net new ARR is weak, capping upside until management demonstrates renewed growth or revises guidance upward in upcoming quarters. AI-driven risks—seat-based pricing exposure and competitive threats—remain central to ZS's valuation discount versus peers like CrowdStrike and Palo Alto.
Zscaler (ZS) has been one of the stocks most watched by Zacks.com users lately. So, it is worth exploring what lies ahead for the stock.
Zscaler is positioned for multi-year growth, targeting $8–10B ARR by FY31, leveraging enterprise AI adoption and a shift to usage-based monetization. ZS's cross-selling potential is substantial, with $15B in untapped whitespace within its existing customer base and strong expansion metrics from the Z-Flex program. Non-seat, AI-driven offerings now comprise 30% of new contract value, with metered recurring revenue growing over 100% YoY, supporting a robust growth runway.
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ZS' revenue growth is set to slow to 17% in fiscal 2027, but rising AI security demand and expanding product offerings are likely to help bridge the growth gap.
Zscaler is rated a Buy, benefiting from robust AI-driven security demand and a credible path to double ARR by 2031. ZS's ARR reached $3.8B last quarter, up 25% YoY, with expanding margins and strong operating leverage supporting long-term growth. Competitive risks from Palo Alto and Microsoft persist, but ZS's high switching costs, deep enterprise integration, and global infrastructure provide durable moats.
A reaffirmed revenue outlook and a fresh security partnership have pushed cybersecurity to the front of the market, and the group's leader is setting the pace. Zscaler (NASDAQ:ZS | ZS Price Prediction) shares are up 6% to $230.
The latest trading day saw Zscaler (ZS) settling at $218, representing a +2.08% change from its previous close.
ZS's 45% three-month rally, strong AI security demand and attractive valuation support holding shares, but slowing growth and rising costs pose risks.
Zscaler Inc. (NASDAQ:ZS)'s reaffirmation of its fiscal 2027 guidance supports confidence in its near-term growth outlook, but its $10 billion annual recurring revenue target for fiscal 2031 looks ambitious, Jefferies said. The cybersecurity company reaffirmed its first-quarter and fiscal 2027 guidance at its investor day, easing concerns about disruption from recent go-to-market leadership changes.