Could Zscaler (NASDAQ: ZS) Test Highs on Earnings?

Zscaler Inc. (NASDAQ: ZS), a global frontrunner in cloud-based cybersecurity is set to report earnings after the close, on a busy afternoon for tech. With the cybersecurity sector booming amid escalating digital threats and enterprise cloud adoption, Zscaler’s robust financial performance, strategic acquisitions, and bullish market sentiment have set the stage for a pivotal moment in the company’s growth trajectory.

Zscaler shares have been on a tear, adding 39% since the start of the year, and 54% over the past 12 months to stand at ~$253. This momentum is not just a product of market enthusiasm but is firmly anchored in the company’s operational and financial achievements.

The upcoming earnings report is widely viewed as a potential catalyst for the next leg up in Zscaler’s stock price. Analysts are forecasting earnings per share (EPS) of $0.76, with the company boasting a history of surpassing expectations. In its most recent quarter, Zscaler beat EPS estimates by $0.09, sparking a nearly 3% gain in the stock price the following day. Revenue growth is expected to remain strong, with the consensus of $667.1 million a 20.59% gain YoY.

A key development fueling optimism is Zscaler’s recent agreement to acquire Red Canary, a leading managed detection and response (MDR) and threat intelligence provider. This acquisition is expected to close by August 2025 and is widely seen as a strategic move to enhance Zscaler’s capabilities in endpoint and identity-based security. Industry analysts believe the integration of Red Canary will accelerate Zscaler’s vision for an AI-powered security operations center (SOC), further differentiating its offering in a crowded and rapidly evolving market.

Zscaler’s Zero Trust Exchange platform remains at the forefront of cloud security innovation, and the company’s expansion into adjacent security solutions positions it to capture a larger share of an expanding addressable market.

Analyst Forecasts and Price Targets

Despite the recent rally, analyst price targets for ZS range from $196.23 to $295.00, with the average of $245.50 suggesting a modest downside from current levels. Targets are notoriously changeable, not least surrounding earnings, so further shifts in this could take place soon, in either direction!

The upcoming earnings announcement is expected to be a critical inflection point. Investors will be scrutinizing not just headline numbers, but also forward guidance, billings growth, and profitability metrics. Zscaler’s management has already raised its fiscal 2025 guidance, projecting revenue between $2.64 billion and $2.654 billion and billings between $3.153 billion and $3.168 billion, a testament to confidence in sustained demand and execution. Further positivity may be expected to maintain the current trajectory.

With a move on the announcement expected either way, it is quite possible that we have either Zscaler trading at new 52 week highs, or testing support. The company’s strong financials, ambitious acquisition strategy, and clear leadership in the fast-growing cybersecurity sector have positioned it as a name to watch.

With Wall Street and Main Street watching closely, Zscaler’s next chapter could be written in the numbers it delivers this evening, and more importantly from the vision it sets for the years ahead.