Zscaler (ZS) Stock Forecast & Price Target

Zscaler is positioned for positive growth due to several favorable factors, including the increasing adoption of SSE/SASE architectures and its strong market presence within the expanding Total Addressable Market (TAM) for cybersecurity solutions. The company anticipates a further increase in its full-year revenue target, projecting a year-over-year growth of 20.4% for FY26, driven by an effective channel partner ecosystem and significant upsell opportunities from its evolving product portfolio. Additionally, the core business remains robust, with notable improvements in growth metrics, including a potential increase in organic Net New Annual Recurring Revenue (NNARR) growth from 1% in FY25 to 9.5% in FY26, indicating a maturation of go-to-market strategies.

Zscaler is currently facing several financial pressures that contribute to a negative outlook, including a projected growth decline to 10-11% for 2025, which is significantly lower than the previous year's growth of over 40%. The company is at risk of multiple compression if investor sentiment deteriorates, particularly due to potential reductions in IT spending and challenges in product execution, especially within its core Secure Service Edge (SSE) segment. Additionally, the recent underperformance and failures to meet growth expectations from both internal initiatives and key partnerships raise concerns about Zscaler's ability to sustain its previous growth trajectory.