Wall Street Analysts Just Trimmed Price Targets for These 10 Stocks

06. Zscaler, Inc. (NASDAQ:ZS)

Price Reaction after the Price Target Cut: -0.45(-0.25%)

On May 20, Barclays analyst Saket Kalia revised down the price target for Zscaler, Inc. (NASDAQ:ZS) from $240 to $205 while maintaining an Overweight rating on the stock. Following this adjustment, Zscaler, Inc. (NASDAQ:ZS) stock price experienced a slight decrease of 0.25%. Zscaler, Inc. (NASDAQ:ZS) operates in the cybersecurity industry and is set to release its fiscal Q3 report on May 30. Kalia’s analysis anticipates billings of $584 million, but suggests that hitting $600 million is feasible, potentially alleviating concerns regarding the implied ramp-up in Q4. Despite expressing a desire to be more optimistic about the stock leading up to earnings, the analyst questions whether the Street’s projection of 23% billings growth for fiscal 2025 needs adjustment for the stock to be more attractive for investors.

Artisan Mid Cap Fund made the following comment about Zscaler, Inc. (NASDAQ:ZS) in its Q3 2023 investor letter:

“Notable trims in the quarter included Zscaler, Inc. (NASDAQ:ZS), BioNTech and Ingersoll Rand. Zscaler provides cloud-based Internet security solutions. In the quarter, it announced solid financial results including 43% revenue growth and 38% growth in billings, which were both ahead of expectations. We believe the dual trends of rising security vulnerability and increased enterprise digitization will lead to sustained demand, even in a recession. Cybersecurity remains a top concern for businesses and governments as cyberattacks can have devastating financial and reputational consequences. Meanwhile, managing the security needs of legacy on-premise applications, a growing number of cloud-based applications (e.g., Office 365 and Salesforce) and more remote workers than before the pandemic make operating IT infrastructures increasingly complex. The stock has been a top performer this year, and we decided to trim the position based on valuation considerations.”