Zscaler Shares Find Analyst Backing Amid Market Volatility

Zscaler US98980G1022

Despite a challenging period marked by sector-wide pressures and internal changes, Zscaler Inc. retains strong conviction from Wall Street analysts. The cybersecurity firm's stock has retreated from recent highs, yet the fundamental growth narrative appears intact to market experts.

The consensus view on Zscaler remains overwhelmingly positive. According to recent coverage, the stock holds a "Strong Buy" rating, supported by 32 buy recommendations, six hold ratings, and zero sell advisories. Analysts have set an average price target of approximately $334.30. This figure implies a potential upside of over 40% from the closing price recorded last Friday. Freedom Capital Markets, for instance, recently reaffirmed a buy recommendation with a specific target of $320.

This sustained optimism highlights a perceived disconnect between the company's operational performance and its recent share price movement.

Quarterly Results and Leadership Transition

The catalyst for the recent downward trend was the release of Zscaler's Q1 FY 2026 results in late November. Operationally, the company posted solid figures: revenue increased by 26% year-over-year to $788.1 million, while annual recurring revenue (ARR) grew to $3.2 billion.

However, these positive numbers were overshadowed by the announcement that long-standing Chief Financial Officer Remo Canessa would be retiring. This news introduced an element of uncertainty for investors, contributing to the stock's decline.

Technical and Fundamental Landscape

From a technical perspective, the share price has fallen significantly from its 52-week high of 292 euros, recently trading around 202 euros. Analysis suggests the $240 region now represents a key resistance level; a sustained break above this point could signal a potential trend reversal.

Fundamentally, the company's growth is still seen as being driven by the broader enterprise shift toward zero-trust security architectures. Zscaler's industry position was further underscored in early December when it received an AWS Partner Award for 2025, reinforcing its leadership in cloud security.

Path Forward and Key Monitoring Points

Looking ahead, the stock's trajectory until the next earnings report—expected for Q2 FY 2026 in late February or early March—is likely to be influenced by technical factors and overall sentiment in the technology sector. A smooth transition of the CFO role will be a critical focal point for investors in the coming weeks as they assess the company's operational stability.

The current environment presents a contrast: robust fundamental growth metrics set against weaker short-term price performance, a dynamic some market observers view as a potential opportunity.