Evercore Hikes Price Target on ZScaler (ZS) After ‘Across-the-Board’ Q3 Beat

Peter Levine, an analyst from Evercore ISI, raised his price target for Zscaler, Inc. (NASDAQ:ZS) from $245 to $290 on May 30 while maintaining an Outperform rating on the company’s shares. Levine’s evaluation came after Zscaler’s performance for the fiscal third quarter of 2025, which he said exceeded expectations “across the board.” The analyst’s comments emphasized a strong demand environment and the company’s new go-to-market strategy’s performance.

Despite Zscaler’s impressive performance, Levine pointed out that expectations for FY26 might require modification. In contrast to the consensus forecasts of 19.5% billing increase and 20.2% revenue growth, management did not provide or endorse any guidance for FY26, which further aggravated this sentiment.

With the fourth fiscal quarter approaching, which is a generally stronger quarter for Zscaler, Inc. (NASDAQ:ZS) as it marks the end of the company’s fiscal year, Levine disclosed encouraging pipeline signals. Additionally, he shared insights about the $675 million acquisition of Red Canary, which is expected to close in August. With an eye toward developing an AI-powered security operations center, Zscaler intends to retain about $70 million of Red Canary’s ARR.

While we acknowledge the potential of ZS to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than ZS and that has 100x upside potential, check out our report about the cheapest AI stock.

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Disclosure: None.