Is Zscaler (ZS) a Wise Investment Choice Ahead of Earnings?

Zscaler’s Upcoming Earnings Report

Cloud security firm Zscaler (ZS) is gearing up to announce its fourth quarter results on September 2nd, right after the market wraps up for the day. Analysts project earnings per share (EPS) to hit $0.80, while revenue is expected to reach around $706.94 million. This indicates a decline of about 9.1% in EPS compared to last year, but revenue would see a significant rise of 19.2%. Ideally, you’d want to see EPS growth outpacing revenue growth.

Interestingly, Zscaler has consistently exceeded its revenue estimates quarter over quarter by a considerable margin. So, EPS may very well show year-over-year growth that outstrips revenue gains. According to Barclays, this positive trend appears to have staying power.

In a recent update, acclaimed analyst Saket Kalia raised Zscaler’s price target from $290 to $300, maintaining a buy recommendation. The firm anticipates Zscaler could achieve a recurring revenue growth rate of 20% for the fiscal year 2026, which is what optimistic investors are really hoping for. Barclays maintains an upbeat outlook on Zscaler as it enters a new fiscal year, crediting its broader platform strategy and a more capable, seasoned sales team.

Market Expectations

If you’re curious about predictions around stock movements post-earnings, TipRanks offers an options tool that can help. It evaluates expected revenue shifts by analyzing the closest options close to the announcement date. Sounds rather technical, right? But, essentially, options traders are anticipating a 10.5% movement in either direction.

Current Analyst Sentiment on ZS Stocks

Looking at the overall perspective, analysts have a strong consensus of buy for ZS stocks, backed by 24 buy ratings, 5 holds, and no sales in the past three months. The average target price is $323.17 per share, which suggests about a 16.7% upside potential. Additionally, TipRanks AI analysts have placed a valuation at a target price of $303 per share.