Zscaler Gets Overweight Rating and $200 Target After 26% Q2 Revenue Surge
Wells Fargo initiated coverage of Zscaler with an Overweight rating and $200 price target, citing growth drivers in Zero Trust Exchange, data security and AI. Zscaler’s fiscal Q2 revenue rose 26% to $815.8 million, ARR climbed 25% to $3.359 billion and full-year ARR growth guidance increased to 24%.
1. Wells Fargo Coverage Initiation
On March 3, Wells Fargo initiated coverage of Zscaler with an Overweight rating and set a $200 price target, highlighting the company’s entrenched position in large enterprises and potential to sustain roughly 20% growth through AI, Zero Trust Exchange and data security offerings.
2. Fiscal Q2 2026 Financial Results
For the quarter ended January 31, Zscaler reported revenue of $815.8 million, up 26% year-over-year, and ARR of $3.359 billion, up 25%. Non-GAAP EPS reached $1.01 and non-GAAP operating income was $181.0 million, representing a 22% margin.
3. Updated Full-Year ARR Guidance
Management raised full-year fiscal 2026 ARR growth guidance to 24%, up from prior targets, driven by continued demand across AI Security, Zero Trust Everywhere and Data Security pillars.
4. Zero Trust Exchange Expansion
The firm’s flagship Zero Trust Exchange was further expanded to secure AI agent activities within enterprise environments, underpinning its strategy to capitalize on AI-powered security trends.