Zscaler Shares: A Clash of Analyst Optimism and Insider Sales

Zscaler US98980G1022

The investment case for cybersecurity firm Zscaler presents a complex picture, caught between solid operational performance and concerning technical signals. A notable divergence has emerged: while a prominent analyst firm has upgraded the stock following a sharp decline, several key company executives have been significant sellers of their holdings.

Operationally, Zscaler continues to demonstrate strength. For its first quarter of fiscal 2026, the company reported earnings per share (EPS) of $0.96, surpassing the consensus estimate of $0.85. Revenue climbed 25.5% year-over-year to reach $788.11 million. Furthermore, management raised its full-year fiscal 2026 outlook, now projecting an EPS range of $3.78 to $3.82.

Analyst Sees Value After Steep Decline

In mid-December, Mizuho Securities shifted its rating on Zscaler from "Neutral" to "Outperform." The firm's analysts cited the stock's significantly lower valuation after a pullback of approximately 31% since late October as the primary reason. They argued that Zscaler remains well-positioned within the high-growth zero-trust security market and that the recent downward move was overdone, creating an attractive risk-reward profile for investors.

Concurrent Insider Selling Activity Creates Tension

Contrasting this bullish analyst view, regulatory filings revealed substantial stock sales by multiple members of Zscaler's top management around the same period:
* Chief Financial Officer Kevin Rubin disposed of 3,303 shares.
* Chief Executive Officer Jagtar Singh Chaudhry sold 2,843 shares. The filing indicated this transaction was to cover tax obligations related to vesting restricted stock units and was not a discretionary sale.
* Chief Product Officer Adam Geller sold a total of 3,680 shares, with a portion executed under a pre-arranged Rule 10b5-1 trading plan.
* Director Robert Schlossman reduced his direct holdings by nearly 4%, selling 3,084 shares.

This simultaneous activity—an analyst upgrade alongside insider sales—creates a clear tension between positive external valuation arguments and tangible capital outflow from the company's leadership.

Technical Picture and Key Levels to Watch

Despite the strong fundamentals, the market has yet to establish a firm technical floor for the stock. Currently trading at €192.84, Zscaler shares are down roughly 34% from their 52-week high and remain well below the 50-day moving average of €243.17. Short-term price action is characterized by volatility and downward momentum.

The stock's near-term trajectory appears to hinge on two critical factors. First, the market must determine whether positive operational results and supportive analyst commentary can outweigh the selling pressure, including any potential future insider sales. Second, technicians will watch for a sustained move back above the 50-day average at €243.17, which would signal a potential recovery. Until that level is reclaimed, the narrative is likely to remain one of robust business metrics on one side, countered by persistent negative momentum on the other.