Zscaler (NASDAQ:ZS) Plunges as COO Jumps Ship
Market News

Zscaler (NASDAQ:ZS) Plunges as COO Jumps Ship

Story Highlights

Zscaler plunges after losing its COO to a cybersecurity startup.

Normally, someone departing the company isn’t, by itself, that bad a sign. If it were, layoffs would do a lot more harm than they usually do. But for cybersecurity stock Zscaler (NASDAQ:ZS), the departure of COO Dali Rajic proved a disaster for the entire company. That was true enough just by looking at Monday afternoon’s trading, in which Zscaler lost over 6% of its value on the news.

As it turns out, the loss of Rajic came at an odd time for Zscaler, as it was actively augmenting its C-suite. Rajic’s departure came within days of Zscaler hiring both a new chief revenue officer and a new chief marketing officer, which was unexpected in and of itself. The CMO concept has fallen on hard times lately, with increasing numbers of firms folding the marketing slot into revenue, product development, or something similar.

And worse for Zscaler investors—based on reports from RBC Capital analyst Matthew Hedberg—Zscaler will still bring out its second-quarter earnings report on February 29, but it will be doing so without reiterating its previous guidance. Still, Hedberg has a Buy rating and a $260 price target.

Why Did Rajic Leave?

Why did Rajic pack up and suddenly depart the company? Certainly, the lack of reiterated guidance isn’t a good sign. The new hires might have played a part, but it’s a safe bet none of them were so odious as to offend Rajic that hard that quickly. No, the answer seems much simpler; Rajic got a better offer. Rajic jumped ship to join Wiz, a cybersecurity startup that’s been steadily growing and will likely look for an IPO in the not-too-distant future.

Is Zscaler a Buy, Sell, or Hold?

Turning to Wall Street, analysts have a Strong Buy consensus rating on ZS stock based on 30 Buys and seven Holds assigned in the past three months, as indicated by the graphic below. After a 72.45% rally in its share price over the past year, the average ZS price target of $241.68 per share implies 5.46% upside potential.



Price Change
S&P 500
Dow Jones
Nasdaq 100

Popular Articles