Why Zscaler Stock Rocketed Higher This Week

Zscaler stock jumped 20.7% this week after Bernstein lifted its price target to $298 from $224, citing improving sentiment across the cybersecurity sector. The new target represents upside of roughly 30% from current levels and marks a significant vote of confidence in the cloud security provider.

The stock now trades at 25.8 times operating cash flow, a steep discount to its five-year historical average of 47.6 times. Bernstein's upgrade suggests the market has overcorrected on ZS, creating an entry point for investors willing to bet on a valuation reversion as cybersecurity demand accelerates.

Not all analysts share Bernstein's optimism. Wedbush recently trimmed its price target to $215, reflecting divergent views on near-term growth prospects. The split creates a wide range of potential outcomes—Wedbush's target implies limited upside from current prices, while Bernstein sees material appreciation ahead.

The 20.7% weekly gain suggests traders are siding with the bullish case for now, betting that valuation compression has run its course.