Zscaler Stock (ZS) Could Have Room to Run, Analyst Note Suggests

Zscaler's stock (NASDAQ: ZS) is attracting renewed attention, as a recent analyst note suggests the cybersecurity firm's stock may have significant upside potential. The company, which has already seen a 62.35% gain year-to-date, is the subject of fresh analysis that could further influence market sentiment.

Berenberg analyst Rahul Chopra initiated coverage of Zscaler with a ‘Buy' rating and a price target of $400, suggesting substantial potential for stock appreciation. Chopra's analysis highlighted Zscaler's strong position in the cybersecurity sector, particularly its Zero Trust Exchange platform.

The firm also launched coverage of cybersecurity peers Okta, SailPoint, Rubrik and SentinelOne. Berenberg views both SentinelOne and Okta as “misunderstood stories where the market is mispricing their duration and awaiting better execution that should drive a re-rating.” SailPoint is shifting to a software-as-a-service model without a premium multiple while Rubrik has strong data-driven upsell momentum and is cleanest way to play the data explosion and artificial intelliotence theme, contends Berenberg.

Zscaler's strategic initiatives, including the late October acquisition of AI security firm SPLX, are viewed as positive steps toward strengthening its market position and driving future growth. The integration of SPLX's technologies is expected to enhance Zscaler's Zero Trust Exchange platform, positioning the company to capitalize on the expanding AI security market.

Further bolstering investor confidence, several financial institutions have recently raised their price targets for Zscaler. Barclays increased its price target to $350, maintaining an ‘Overweight' rating, while Wedbush Securities also raised its price target to $350, with an ‘Outperform' rating.

Price Targets

However, Zscaler has faced challenges that have introduced elements of caution among markets. In September, the company confirmed a data breach resulting from a third-party cyberattack, raising concerns about its security measures. The breach exposed sensitive customer information, potentially impacting investor confidence, even though Zscaler's core systems were not directly affected.

Additionally, the announcement of a proposed offering of $1.5 billion in convertible senior notes due 2028 in June 2025 led to a stock decline, reflecting investor apprehension about potential stock dilution.

The analyst's ‘Buy' rating, alongside a lofty price target, suggests that Zscaler's stock price could have plenty of room to run, but this will depend on the company's ability to execute its strategic initiatives and allay market concerns.