Why Zscaler, Inc. (ZS)’s Price Cut Isn’t the Full Story

Zscaler, Inc. (NASDAQ:ZS) is among the best software infrastructure stocks to buy now. On May 1, Citizens trimmed the price target on Zscaler, Inc. (NASDAQ:ZS) to $210 from $290 and reiterated an Outperform rating, as reported by TheFly. A rise in concerns about frontier AI-powered cyber risks has led to a sharp re-rating of cybersecurity valuations ahead of Q1 earnings, the firm said, adding that this comes despite strong demand for zero-trust and SASE solutions. This signals potential risks in model behavior and revised industry data highlighting current security needs.

Back on April 22, Morgan Stanley also cut the price target on Zscaler, Inc. (NASDAQ:ZS) to $155 from $200, while downgrading the stock from Overweight to Equalweight. Just last year, the firm upgraded the company in anticipation of platform expansion, positioning it to emerge as a third key platform vendor through the Red Canary acquisition, data security, and digital experience.

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However, Morgan Stanley hasn’t yet seen strong traction with Red Canary comparable to ZDX bookings, with its 80% YoY surge to $100 million ARR. Although risks like increased competition exist, Zscaler, Inc. (NASDAQ:ZS)’s 53.78% upside potential and support from the majority of analysts make it one of the best software infrastructure stocks to buy now.

Zscaler, Inc. (NASDAQ:ZS) is a California-based cloud security company that offers cyberthreat protection, security operations, and data security products. Founded in 2007, the company serves a diverse range of markets, including automotive, energy, financial services, and healthcare.

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