Zscaler price target lowered to $310 from $350 at Needham

Needham lowered the firm’s price target on Zscaler (ZS) to $310 from $350 and keeps a Buy rating on the shares after its Q1 results and updated guidance. The primary focus of the quarter is what to make of Q1 annual recurring revenue – ARR – and while the company reported 26% y/y growth for $3.2B in ARR, exceeding consensus by $22M, the management raised FY26 guide by $21M at the midpoint and also did not quantify the Red Canary contribution despite the acquisition trending above prior expectations, the analyst tells investors in a research note. Concrete data will likely only come with Q2 results, while the stock has already outperformed peers on a year-to-date basis, the firm added.