Zscaler (ZS) Stock Slides 10% as Analysts Boost Price Targets Post Leadership Shift

Key Takeaways

• Zscaler (ZS) stock declined 10% to $193.05 despite upward price target revisions from analysts.
• RBC Capital increased its price target to $236 from $210, maintaining an Outperform rating.
• Mizuho boosted its target to $220 from $210, also keeping its Outperform stance.
• Both moves came after Ross Tackett was named CRO, replacing Mike Rich.
• The company plans an Investor Day event on October 6.

Shares of Zscaler (ZS) tumbled 10% to $193.05 this week, despite receiving upgraded price targets from two prominent Wall Street firms. The decline comes as a surprise given the optimistic outlook from analysts following an executive transition at the cloud security provider.

Zscaler, Inc., ZS

RBC Capital boosted its price objective to $236 from $210. The investment bank maintained its Outperform rating on the security.

Mizuho followed suit, increasing its price target to $220 from $210 while reaffirming an Outperform recommendation.

The catalyst for both revisions was a leadership transition in the Chief Revenue Officer position. Mike Rich departed the role citing personal reasons.

Ross Tackett now leads as CRO. He previously held the position of head of worldwide sales and managed operations across the Americas.

Since May, Tackett has been the de facto leader of the sales division. His professional background includes working with Rich at ServiceNow in previous roles.

Wall Street Analyst Perspectives

RBC Capital clarified that the executive change wasn’t connected to any dispute or underperformance. The firm anticipates a seamless handoff with no changes to the sales approach.

Mizuho conducted direct conversations with Zscaler executives. According to the firm, management stressed operational continuity, highlighting Tackett’s integral role in developing the company’s financial projections.

Mizuho noted that management didn’t view a formal guidance update as warranted. This is because Tackett had already played a key role in formulating the outlook provided just three weeks earlier.

The analysts partially attributed their elevated price targets to expanding valuation multiples among comparable companies. Mizuho believes Zscaler maintains a strong competitive position in SASE and Zero Trust markets, even amid increasing industry competition.

Quarterly Performance and Additional Analyst Commentary

The target upgrades came on the heels of Zscaler’s fiscal 2026 fourth quarter performance. The company posted revenue of $898.2 million, representing 25% year-over-year growth and exceeding analyst expectations by approximately 2%.

FBN Securities lifted its price target to $190 following the earnings release. JPMorgan maintained a $215 target with an Overweight rating, highlighting that both revenue and annual recurring revenue surpassed estimates by larger margins than in previous quarters.

Stephens also increased its forecast, raising the target to $225 after the results. Guggenheim affirmed its Buy rating with a $214 target following the CRO announcement.

The company’s gross profit margin reached 77% over the trailing twelve months. Revenue expanded 25% during the same timeframe.

Based on InvestingPro data referenced in analyst reports, 36 analysts have revised their earnings projections upward for upcoming periods. The platform’s calculated fair value estimate stands at $226.27.

Rich will continue in an advisory role at Zscaler until December 2026. The company has scheduled its Investor Day presentation for October 6.