Needham Boosts Zscaler (ZS) Price Target, Keeps Buy Rating

On Friday, May 30, Needham raised the price target for Zscaler, Inc. (NASDAQ:ZS) from $240 to $310 and maintained a “Buy” rating. This decision follows the company’s strong results for its third quarter of fiscal year 2025, which exceeded analysts’ forecast in billings.

An employee standing in front of a large data center, looking toward the future of cloud security.

Needham noted that Zscaler, Inc. (NASDAQ:ZS) had a successful quarter. The company’s management decided to add all the extra billings from the third quarter to their full-year forecast and also slightly increased the billings forecast for the fourth quarter. This led to a strong beat-and-raise scenario. Moreover, Zscaler, Inc.’s (NASDAQ:ZS) Remaining Performance Obligations (RPO) Bookings grew by 36% compared to the previous year, reaching above the $1 billion mark.

Needham analysts pointed out the positive impact of Chief Revenue Officer, Mike Rich, who has helped Zscaler, Inc. (NASDAQ:ZS) expand its platform and update its go-to-market strategy. These changes seem to be working well as the company is now building stronger relationships with customers with an aim to get a bigger share of customer spending.

Zscaler, Inc. (NASDAQ:ZS) is an American cloud security company that offers a Zero Trust Exchange platform. It helps customers modernize security, streamline operations, and accelerate digital transformation.

While we acknowledge the potential of ZS as an investment, 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’ a 100x upside potential, check out our report about the cheapest AI stock.

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Disclosure: None.