In a report released today, Keith Weiss from Morgan Stanley maintained a Hold rating on Zscaler (ZS – Research Report), with a price target of $280.00.
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Keith Weiss has given his Hold rating due to a combination of factors that reflect both positive developments and cautious considerations. Zscaler’s recent financial performance has been strong, with the company exceeding expectations in several key areas such as billings, operating income, and free cash flow. The company has demonstrated solid momentum in securing large deals and expanding its customer base, particularly in new growth categories like Zero Trust Everywhere and Data Security Everywhere.
Despite these positive indicators, Weiss remains cautious due to the competitive dynamics in the market and the significant stock price increase of around 40% year-to-date. The current valuation appears to be in line with its cybersecurity peers, suggesting that the recent performance improvements may already be priced in. Additionally, there are factors such as a pending acquisition and CFO transition that warrant careful monitoring. These elements contribute to the decision to maintain a Hold rating, reflecting a balanced view of the company’s prospects.
In another report released yesterday, Piper Sandler also downgraded the stock to a Hold with a $260.00 price target.
Based on the recent corporate insider activity of 43 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of ZS in relation to earlier this year.