Wall Street sees 29% upside for Zscaler as eight firms raise price targets

Eight Wall Street firms raised their price targets on Zscaler (NASDAQ:ZS | ZS Price Prediction) after Stifel noted the company held its first analyst day since 2021. The stock trades at $213.01. Shares have gained 25.45% over the past month but remain down 30.22% from a year ago. Every firm raised its target. They still disagree on the rating, and that disagreement tells investors more than the headline raises.

What Zscaler Promised Wall Street

Canaccord says Zscaler used its investor day to put limits around a $10 billion ARR ambition. Annual recurring revenue (ARR) is the yearly value of the subscription contracts customers have signed. It shows how much repeat business a company has already locked in. Total ARR was at $3.77B at the end of fiscal 2026. BofA notes management reaffirmed its Q1 and FY27 guidance.

The AI pitch rests on zero trust. Older security systems let a verified user onto the corporate network and then trusted them inside it. Zero trust checks every single request and connects users, and now AI agents, only to the specific application they need. A compromised account or rogue agent can’t move freely. “An attacker, human or agent, cannot breach what it cannot reach,” the chief executive said on the September 2026 earnings call.

Price Target Spread Exposes a Ratings Split

Seven of eight firms rate the stock Buy or Overweight. Meta Marshall of Morgan Stanley raised his target to $185 and kept an Equal Weight rating. That target sits below the current share price. When an analyst raises a target that still trails the stock, the message is that the business got better but the stock already reflects the improvement. A price target is an analyst’s valuation estimate. It reflects one analyst’s view of fair value at a point in time.

Disagreement Over the $10 Billion Number

BofA says Zscaler laid out a path to more than $8 billion of ARR by FY31, a lower figure than the headline ambition. Cantor’s Jonathan Ruykhaver says reaching $10 billion in annual recurring revenue comes down to sales execution but leaves the FY31 target within reach. An ambition is a goal the company sets for itself. A modeled forecast is what an analyst expects actually to happen. Investors should treat the gap between the two as real.

Sales execution is the central risk. Two sales leaders left during the prior quarter, and management expects that transition to play out in the first half of fiscal 2027.

Did Analyst Day Change Anything? Track Q1 Net New ARR

Yes, but only for the long-term outlook. The higher target came with no change to near-term guidance. The key thing to check is net new ARR in Q1. Management expects that quarter to deliver 15% of fiscal 2027’s net new ARR. A result at or above that level would support the Buy camp’s case. A miss would make Morgan Stanley’s $185 target look like the more grounded call on Zscaler stock.

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