Zscaler Inc ZS shares rallied in early trading on Friday, after the company on Thursday reported upbeat results for its fiscal third quarter.

The announcement came amid an exciting earnings season. Here are some key analyst takeaways.

Piper Sandler On Zscaler

Analyst Rob Owens downgraded the rating from Overweight to Neutral, while raising the price target from $235 to $260.

Zscaler reported solid results for the fiscal third quarter, with billings and revenues surpassing Street expectations, "while new products continue to gain traction," Owens said in the downgrade note. Revenues grew 23% year-on-year to $678 million, coming in above the guidance midpoint by 1.8%, he added.

Calculated billings grew 26% year-on-year to $785 million, beating Street expectations by $25 million, the analyst stated. "However, as we contemplate the recent momentum of the stock and incremental near-term risks in the Red Canary acquisition integration + Fed uncertainty, we believe shares are fairly balanced at current levels," he further wrote.

RBC Capital Markets On Zscaler

Analyst Matthew Hedberg maintained an Outperform rating, while lifting the price target from $288 to $304.

Zscaler reported strong quarterly results, "with outperformance across the board against high investor expectations," Hedberg said. The company did not experience any "noticeable impact" from tariffs, he added.

Management raised their full-year guidance across the board, projecting revenue and billings growth of 23% and 21.5%, up from their prior outlook of 22% and 20.5%, respectively, the analyst stated. "Like cyber peers, Zscaler introduced Z-Flex, a new purchasing program to ease procurement and increase module adoption," he further wrote.

Citizens On Zscaler

Analyst Trevor Walsh reiterated a Market Outperform rating, while raising the price target from $240 to $310.

Zscaler reported non-GAAP earnings of 84 cents per share, beating consensus of 76 cents per share, Walsh said. The company announced the appointment of Kevin Rubin as chief financial officer, he added.

Zscaler announced plans to acquire managed detection and response (MDR) provider Red Canary to boost its AI-powered security operations center (SOC) capabilities, the analyst wrote. The acquisition is expected to close in August 2025, he added.

KeyBanc Capital Markets On Zscaler

Analyst Eric Heath reaffirmed an Overweight rating, while taking the price target higher from $290 to $310.

Zscaler reported a strong beat in the quarter, with ARR (annual recurring revenue) growing 23% year-on-year to around $2.9 billion, Heath said. Billings came in at $785 million, beating consensus of $761 million, he added.

Management's guidance implied billings of $1,140-$1,145M million for the fiscal fourth quarter, representing 25%-26% year-on-year growth, in-line with expectations, the analyst stated. "We see strong momentum in the SASE market, a strengthening portfolio of emerging products to cross-sell, and an experienced GTM leadership team selling to the C-suite," he further wrote.

Truist Securities On Zscaler

Analyst Joel Fishbein maintained a Buy rating, while lifting the price target from $260 to $300.

Zscaler reported a record quarter, with more than $1 billion in in TCV (total contract value) bookings, Fishbein said. The company's strong results were "driven by improving sales productivity and lower attrition," he added.

Zscaler witnessed growing customer demand for the platform, "in particular Zero Trust Everywhere, Data Security Everywhere, and Agentic Operations solutions," the analyst wrote. Management flowed the beat to their full-year outlook, he further stated.

Check out other analyst stock ratings.

Wedbush On Zscaler

Analyst Daniel Ives maintained an Outperform rating, while raising the price target from $240 to $300.

Zscaler reported a beat across the board, with strong billings due to continued robust demand for its zero trust and AI security solutions, Ives said.

"Management announced on the call that starting in FY26, the company will switch from billings to ARR as the main metric to properly use for ZS going forward," he further wrote.

Cantor Fitzgerald On Zscaler

Analyst Jonathan Ruykhaver reiterated an Overweight rating, while raising the price target from $275 to $290.

Zscaler's revenue and cRPO (current remaining performance obligation) bookings grew 23%, "reflecting strong customer demand for the Zero Trust Exchange platform," Ruykhaver said. The company's emerging growth categories, Zero Trust Everywhere, Data Security Everywhere and Agentic Operations, were the key drivers, with combined ARR of around $1 billion, he added.

Customers contributing $1 million in ARR grew 27% year-on-year in the quarter, while those spending over $100,000 grew 18% to 3,363, the analyst further stated.

Needham On Zscaler

Analyst Mike Cikos reaffirmed a Buy rating, while lifting the price target from $240 to $310.

Zscaler reported "another strong quarter," outperforming billings expectations again, Cikos said. Management raised their full-year billings guidance "by passing through the entirety of the upside in 3QFY25 and nudging 4QFY25 slightly higher," he added.

"We believe the platform expansion and go-to-market changes under Chief Revenue Officer Mike Rich are taking hold as Zscaler looks to emulate the ServiceNow model by driving deeper, more strategic relationships with customers while gaining greater wallet-share," the analyst wrote.

Rosenblatt Securities On Zscaler

Analyst Catharine Trebnick reiterated a Buy rating, while raising the price target from $235 to $315.

Zscaler delivered a "standout" performance in the quarter, exceeding expectations on growth and profitability, Trebnick said. Operating margin came in at 21.6%, around 40 basis points (bps) higher than Street expectations, she added.

"The company remains on a path toward its long-term $5B+ ARR target, supported by strategic initiatives like the acquisition of Red Canary and the appointment of a new CFO," the analyst wrote.

Stephens On Zscaler

Analyst Todd Weller maintained an Overweight rating and price target of $255.

Zscaler's billings beat consensus by 3.2%, while revenue by 1.8%, Weller said.

"Zscaler also announced Kevin Rubin as new CFO. Mr. Rubin was previously CFO of Alteryx, an AI and cloud analytics platform provider that was acquired by Clearlake Capital and Insight Partners in March 2024," the analyst wrote.

Guggenheim Securities On Zscaler

Analyst John DiFucci reaffirmed a Neutral rating on the stock.

Zscaler's results beat consensus estimates across the board and the company raised its full-year guidance, "which is about as good as it gets relative to expectations in the security sector this quarter," DiFucci said.

Growth in new ACV was modestly better than the previous quarter's 1% growth and the third quarter "had the easiest comp of the year," which implies that "business momentum (as measured by a 2-year stack of New ACV growth) modestly deteriorated in F3Q," the analyst wrote.

ZS Price Action: Shares of Zscaler had risen by 8.56% to $272.27 at the time of publication on Friday.

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