Wells Fargo bullish on Zscaler with $200 price target after strong earnings
Wells Fargo has initiated coverage of Zscaler (NASDAQ: ZS), expressing a bullish outlook. On March 3, 2026, the bank assigned an Overweight rating and set a $200 price target. This follows Zscaler's robust second-quarter results for fiscal 2026, where revenue surged 26% year-over-year.
Zscaler's latest earnings report surpassed expectations, with revenue rising 26% compared to the same period last year. Non-GAAP earnings per share reached $1.01, exceeding the $0.86 consensus estimate. Despite these figures, some analysts have revised their price targets downward, citing concerns about market contraction and long-term growth sustainability.
The company has already secured 45% of the Fortune 500 and 40% of the Global 2000. Its penetration stands at around 20% among enterprises with over 2,000 employees. With approximately 6,200 staff at the time of Wells Fargo's review, Zscaler continues expanding its reach.
Wells Fargo remains optimistic about Zscaler's prospects, estimating that new customer acquisitions could add $300 million to $400 million annually. The bank expects about 700 new logos per year, even amidst concerns about market saturation. It also views recent worries over Red Canary as a buying opportunity.
Looking ahead, the firm believes Zscaler's core operations will remain stable. Growth in newer areas—such as the Zero Trust Exchange, data security, and AI—could maintain a 20% expansion rate in the coming years.
Wells Fargo's coverage begins with a positive stance, setting a $200 target for Zscaler. The company's recent earnings and market position support its growth outlook. Analysts highlight new customer gains and emerging technologies as key drivers for future performance.
