Zscaler slides as investors continue to focus on lowered cash-flow outlook after recent results

Zscaler, Inc. (ZS) is down 6.0% today. Here is some analysis on what might have caused this price movement.

Analysis: The move appears tied to continued post-earnings pressure after Zscaler’s recent quarterly update highlighted a lower free-cash-flow margin outlook, which can weigh on high-multiple software names. Ongoing price-target cuts and rating adjustments following that update may also be keeping sentiment cautious.

Details:

In its fiscal third-quarter update filed on May 26, 2026, Zscaler reduced its fiscal 2026 free cash flow margin outlook to about 22.8%–23.3%, down from its prior expectation of 26.5%–27%.

The company tied the lower free-cash-flow margin outlook to higher capital expenditures (capex) as a percentage of revenue for fiscal 2026.

Despite strong headline results, the cash-flow guide cut can lead investors to re-rate the stock, especially when the market is emphasizing durability of cash generation.

In the days following the results, multiple Wall Street firms trimmed price targets (and in some cases updated ratings), which can add incremental selling pressure as investors reassess expectations.

Sources:

Zscaler Investor Relations, SEC, MarketBeat, Schwab Network

Disclaimer: This price movement analysis was generated with the help of AI. Please double-check the information provided for mistakes.

$ZS Insider Trading Activity

$ZS insiders have traded $ZS stock on the open market 18 times in the past 6 months. Of those trades, 0 have been purchases and 18 have been sales.

Here’s a breakdown of recent trading of $ZS stock by insiders over the last 6 months:

ROBERT SCHLOSSMAN (Chief Legal Officer) has made 0 purchases and 3 sales selling 7,696 shares for an estimated $1,613,040.
MICHAEL J. RICH (CRO and President of WW Sales) has made 0 purchases and 2 sales selling 7,247 shares for an estimated $1,439,157.
ADAM GELLER (Chief Product Officer) has made 0 purchases and 4 sales selling 7,259 shares for an estimated $1,406,640.
RAJ JUDGE (EVP, Corp. Strategy & Ventures) has made 0 purchases and 2 sales selling 5,926 shares for an estimated $1,183,160.
KEVIN RUBIN (Chief Financial Officer) has made 0 purchases and 2 sales selling 4,985 shares for an estimated $1,025,785.
JAGTAR SINGH CHAUDHRY (CEO & Chairman) has made 0 purchases and 2 sales selling 4,784 shares for an estimated $960,166.
JAMES A BEER has made 0 purchases and 2 sales selling 830 shares for an estimated $175,222.
ANDREW WILLIAM FRASER BROWN sold 5,000 shares for an estimated $0

To track insider transactions, check out Quiver Quantitative's insider trading dashboard. You can access data on insider stock transactions through the Quiver Quantitative API insider transaction endpoint.

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$ZS Hedge Fund Activity

We have seen 378 institutional investors add shares of $ZS stock to their portfolio, and 609 decrease their positions in their most recent quarter.

Here are some of the largest recent moves:

FMR LLC removed 2,339,184 shares (-51.6%) from their portfolio in Q1 2026, for an estimated $328,164,123
FEDERATED HERMES, INC. removed 1,074,482 shares (-89.2%) from their portfolio in Q1 2026, for an estimated $150,739,079
T. ROWE PRICE INVESTMENT MANAGEMENT, INC. removed 999,599 shares (-44.3%) from their portfolio in Q4 2025, for an estimated $224,829,807
TWO SIGMA INVESTMENTS, LP added 974,678 shares (+483.9%) to their portfolio in Q1 2026, for an estimated $136,737,576
FIRST TRUST ADVISORS LP added 935,781 shares (+36.2%) to their portfolio in Q1 2026, for an estimated $131,280,716
D. E. SHAW & CO., INC. removed 872,732 shares (-70.6%) from their portfolio in Q4 2025, for an estimated $196,294,881
PRICE T ROWE ASSOCIATES INC /MD/ removed 823,148 shares (-32.0%) from their portfolio in Q1 2026, for an estimated $115,479,432

To track hedge funds' stock portfolios, check out Quiver Quantitative's institutional holdings dashboard. You can access data on hedge funds moves and 13F filings through the Quiver Quantitative API 13F endpoint.

$ZS Analyst Ratings

Wall Street analysts have issued reports on $ZS in the last several months. We have seen 4 firms issue buy ratings on the stock, and 0 firms issue sell ratings.

Here are some recent analyst ratings:

Macquarie issued a "Outperform" rating on 02/27/2026
Citigroup issued a "Buy" rating on 01/13/2026
Keybanc issued a "Overweight" rating on 01/12/2026
RBC Capital issued a "Outperform" rating on 01/05/2026

To track analyst ratings and price targets for $ZS, check out Quiver Quantitative's $ZS forecast page.

$ZS Price Targets

Multiple analysts have issued price targets for $ZS recently. We have seen 32 analysts offer price targets for $ZS in the last 6 months, with a median target of $200.0.

Here are some recent targets:

John Difucci from Guggenheim set a target price of $214.0 on 06/01/2026
Richard Poland from Wells Fargo set a target price of $180.0 on 05/28/2026
Adam Borg from Stifel set a target price of $175.0 on 05/27/2026
Peter Levine from Evercore ISI Group set a target price of $155.0 on 05/27/2026
Shrenik Kothari from Baird set a target price of $230.0 on 05/27/2026
Peter Weed from Bernstein set a target price of $224.0 on 05/27/2026
Mike Cikos from Needham set a target price of $180.0 on 05/27/2026

This article is not financial advice. See Quiver Quantitative's disclaimers for more information. Note that there may be inaccuracies due to mistakes in ticker-mapping, and other anomalies.