ZS

Zscaler (ZS), a cloud-based security solutions provider, has been identified as a #2 (Buy) on the Zacks Rank with a VGM Score of B. The stock has shown strong momentum with a 5.1% gain over the past four weeks, supported by 14 analyst upward earnings revisions in the last 60 days, bringing the consensus estimate to $4.91 per share with a +10.9% average earnings surprise.

The article examines whether Zscaler represents an undervalued investment opportunity in the cybersecurity sector. It notes that investor sentiment is high in the cybersecurity industry, with the analysis published in October 2026 as cyber criminals gain increasing capabilities through agentic AI.

Zscaler (ZS) declined 3.44% on October 14, 2026, underperforming the S&P 500's 1.11% loss. Despite a 17.93% monthly gain, the stock faces headwinds.

The company is expected to report strong earnings growth of 20.83% YoY with revenue projected at $937.61 million (up 18.97% YoY). However, Zscaler holds a Zacks Rank of #3 (Hold) with a Forward P/E of 46.57, trading at a discount to its industry average. The Security industry ranks in the bottom 31% of all industries.

Zscaler (ZS) has gained 17.8% over the past month, outperforming the S&P 500. The cloud-based security provider shows strong earnings growth of +20.8% year-over-year for the current quarter and +16.6% for the fiscal year.

However, the stock is rated Zacks Rank #3 (Hold) and receives an F valuation grade, indicating it is trading at a premium to peers. While the company has consistently beaten consensus estimates, its current valuation suggests it may perform in line with the broader market in the near term.

Zscaler (ZS), a cloud-based security solutions provider, receives a #3 (Hold) rating on the Zacks Rank but shows strong growth potential with a Grade A Growth Style Score. The company is forecasting 16.6% year-over-year earnings growth for the current fiscal year, with 14 analysts revising earnings estimates upward in the last 60 days. Despite the Hold rating, the stock's solid fundamentals and growth prospects make it worthy of investor consideration.

Zscaler faces a growth slowdown with FY27 revenue expected to increase only 17% compared to 25% in FY26. However, the company's AI security products show promise, with Security for AI bookings surging over 50% sequentially in Q4.

The key question is whether AI security offerings can generate sufficient revenue to offset the broader growth deceleration. Competitors Palo Alto Networks and Fortinet are also capitalizing on strong AI security demand.

Zscaler (ZS) closed at $218.00, up 2.08%, outperforming the S&P 500's 0.47% decline. The cloud-based security provider has gained 28.57% over the past month.

Upcoming earnings are projected at $1.16 EPS (up 20.83% YoY) with revenue expected at $937.61 million (up 18.97% YoY). The stock holds a Zacks Rank #3 (Hold) with a Forward P/E of 43.49, trading at a discount to its industry average of 55.51.

Zscaler (ZS) shares surged 45.1% in three months, outperforming peers like Fortinet, CrowdStrike, and Palo Alto Networks. The rally is supported by strong Q4 FY26 results with 24.9% revenue growth and AI security bookings up 50% sequentially.

However, revenue growth is expected to slow to 17% in FY27, capital spending is rising, and free cash flow margins are declining. The stock trades at a reasonable 8.60x forward P/S ratio, but existing shareholders should hold while new investors should wait for a better entry point.

With the S&P 500 trading at historically elevated valuations (second-highest since the dot-com bubble), rising inflation, interest rate hikes, and potential AI development slowdowns pose risks to the market. The article recommends three stocks as potential buying opportunities if a market correction occurs: Zscaler for its zero-trust cybersecurity solutions, Uber for its autonomous vehicle partnerships, and DigitalOcean for its AI data center infrastructure.

Cloudflare launched Basin, a serverless data platform built on Apache Iceberg and Cloudflare R2, to help customers collect, store, and analyze data without managing dedicated servers. The platform aims to simplify data management and reduce infrastructure costs, particularly for AI and cloud applications.

However, Cloudflare faces intense competition from Palo Alto Networks and Zscaler, who are also expanding their platforms with AI capabilities. Despite strong year-to-date stock performance (+80%), Cloudflare trades at a significantly elevated valuation (P/S ratio of 35.81 vs. industry average of 4.44) and carries a Zacks Rank #3 (Hold) rating.

AMD reports strong AI chip demand exceeding supply with plans to substantially increase production in 2027. Anthropic commits $518 billion in non-cancelable cloud spending over the next decade.

Terafab, a vertically integrated semiconductor initiative by Elon Musk's companies, is in discussions with TSMC for potential collaboration. Zscaler reaffirms guidance amid growing cybersecurity concerns from autonomous AI agents. Wells Fargo raises Meta's price target to $1,000 citing AI cycle potential.

Pomerantz LLP is investigating Zscaler, Inc. for potential securities fraud following two significant stock price declines. The first occurred on May 27, 2026, when the stock fell 31.52% after the company issued lower-than-expected guidance for current-quarter revenue.

The second decline of 10.06% happened on September 25, 2026, following the announcement of Chief Revenue Officer Mike Rich's departure. Investors are invited to join the class action lawsuit.

AMD reports sustained high demand for compute chips with plans to substantially increase supply by 2027. SpaceX and TSMC explore a Texas semiconductor partnership through the Terafab project to consolidate chip production.

Anthropic commits $518 billion in non-cancelable cloud spending over the next decade. Zscaler warns that autonomous AI agents will become a major cybersecurity risk vector. Wells Fargo raises Meta's price target to $1,000 citing AI cycle expansion.

Zscaler (ZS) closed at $196.60, down 1.1% on a day when the S&P 500 gained 0.73%. The cloud-based security provider has risen 11.8% over the past month.

Analysts project Q earnings of $1.16 EPS (up 20.83% YoY) and full-year earnings of $4.91 per share with revenue of $3.93 billion (up 17.22% YoY). The stock trades at a Forward P/E of 40.48, below the industry average of 54.15, and carries a Zacks Rank of #3 (Hold).

AI-driven cyberattacks are prompting organizations to prioritize cybersecurity, boosting demand for exposure management solutions. Tenable, which specializes in vulnerability identification and AI-powered exposure management through its Tenable One platform, has gained 48.6% year-to-date but trades at a P/S ratio of 3.9—significantly cheaper than rivals like CrowdStrike, Palo Alto Networks, and Zscaler. The company is improving profitability while maintaining modest 8.6% revenue growth, positioning it as a potential bargain in the expanding cybersecurity market.

Zscaler (ZS), a cloud-based security solutions provider, is highlighted as a stock to watch with strong momentum performance. The company has seen 14 analysts revise earnings estimates upward in the last 60 days, with the consensus estimate increasing to $4.91 per share for fiscal 2027. Despite holding a #3 (Hold) Zacks Rank, ZS boasts an A-rated Momentum Style Score and has gained 11.8% over the past four weeks.

Zscaler (ZS) has gained 11.8% over the past month, outperforming the S&P 500. The company shows strong earnings growth expectations (+20.8% YoY for current quarter) and consistent revenue beats. However, it carries a Zacks Rank #3 (Hold) rating and trades at a premium valuation (F grade) compared to peers, suggesting near-term performance may align with the broader market.

Zscaler's 2026 Ransomware Report reveals a 275% increase in ransomware attacks aided by AI, with threat actors stealing nearly 900 terabytes of data and extorting $328 million from companies. Attackers are increasingly targeting senior executives and abusing trusted enterprise tools like Microsoft Teams for lateral movement and data theft.

Palo Alto Networks (PANW) is capitalizing on growing demand for network security as companies expand AI infrastructure. The company secured multiple seven-figure bookings from sovereigns, neoclouds, and frontier AI labs in fiscal 2026.

Agentic traffic on PANW's SASE platform surged 9x over nine months, while Network & AI Security revenues grew 17% to $8.35 billion. Competitors Fortinet and Zscaler are also benefiting from similar AI-driven security demand trends.

AI stocks are experiencing a significant sell-off, with the Nasdaq-100 down 5.5% last week. The article identifies Duolingo and SentinelOne as potential bargain opportunities during this market downturn, as both companies are well-positioned to benefit from long-term AI adoption despite current market pressures.