TLDR
- Zscaler (ZS) shares fell 10% to $193.05 even as analysts raised price targets.
- RBC Capital lifted its target to $236 from $210, keeping an Outperform rating.
- Mizuho raised its target to $220 from $210, also maintaining Outperform.
- The moves follow a CRO change, with Ross Tackett replacing Mike Rich.
- Zscaler holds an Investor Day on October 6.
Zscaler (ZS) stock dropped 10% to $193.05 this week, even as two major analyst firms raised their price targets. The drop stands in contrast to the bullish tone from Wall Street following a leadership change at the cybersecurity company.
RBC Capital raised its price target to $236 from $210. The firm kept its Outperform rating in place.
Mizuho made a similar move, lifting its target to $220 from $210. It also maintained an Outperform rating on the stock.
Both firms pointed to the same trigger: a change in Zscaler’s Chief Revenue Officer role. Mike Rich stepped down from the position for personal reasons.
Ross Tackett has taken over as the new CRO. He previously served as head of worldwide sales and ran the Americas business.
Tackett has effectively been running the sales organization since May. He also worked alongside Rich in a past role at ServiceNow.
What Analysts Are Saying
RBC Capital said the leadership change isn’t tied to any disagreement or performance issue. The firm expects a smooth transition with no shift in go-to-market strategy.
Mizuho spoke directly with Zscaler management. The firm said leadership emphasized continuity, pointing to Tackett’s deep involvement in building the company’s forecasts.
Mizuho added that a formal reiteration of guidance wasn’t seen as necessary. That’s because Tackett was already central to shaping the outlook when it was issued three weeks ago.
Both firms tied their higher price targets partly to rising peer multiples across the sector. Mizuho said Zscaler remains well positioned in the SASE and Zero Trust space, despite more competition in the market.
Recent Earnings and Other Analyst Moves
The price target increases follow Zscaler’s fourth quarter results for fiscal 2026. Revenue came in at $898.2 million, up 25% year-over-year and ahead of consensus by roughly 2%.
FBN Securities raised its target to $190 after the earnings report. JPMorgan kept its target at $215 and reiterated an Overweight rating, noting revenue and annual recurring revenue beat estimates by a wider margin than earlier in the year.
Stephens also raised its target, moving to $225 following the results. Guggenheim kept a Buy rating with a $214 target after the CRO announcement.
Zscaler’s gross profit margin stands at 77% over the past twelve months. Revenue growth over that same period sits at 25%.
According to InvestingPro data cited in analyst notes, 36 analysts have revised earnings estimates upward for the coming period. The company’s fair value estimate from the platform sits at $226.27.
Rich will stay on with Zscaler in an advisory capacity through December 2026. Zscaler is scheduled to hold its Investor Day on October 6.
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