KeyBanc Just Upgraded Its Price Target on Zscaler Stock. Here's Why.

Zscaler (ZS) stock inched higher on Friday after KeyBanc lifted its price target on the cybersecurity company, citing its leadership in the SASE market. In a research note on Aug. 21, analyst Eric Heath maintained an “Overweight” rating on ZS but upwardly revised his price target to $210, indicating 17% upside from current levels. 

KeyBanc’s research report arrives at a time when Zscaler shares are regaining investor interest, currently up more than 45% versus their June low. 

Why Does KeyBanc Recommend Buying Zscaler Stock?

KeyBanc’s bullish view is partly based on signs of an “improved security spend environment.”

The investment firm said its latest channel checks were broadly steady versus the prior quarter, while conversations with chief information security officers suggest roughly 20% of organizations are spending incrementally following Mythos. 

The near-term areas of urgency include continuous threat exposure management, patching, network segmentation, penetration testing, code-scanning tools and additional security headcount.  

Heath’s bullish note on ZS stock is particularly significant given it lands just days before the firm’s Q4 results on Sept. 3. Consensus is for Zscaler to report $0.06 in earnings per share (EPS) for its fourth financial quarter, which would represent remarkable year-over-year growth of 250%. 

ZS Shares Are Attractively Priced in 2026

Heath expects network segmentation to become an increasingly important customer priority and believes Zscaler is particularly well positioned because of its cloud-based security architecture.

Valuation is another key part of his bullish argument. Zscaler shares trade at about 6.6x revenue versus roughly 10.7x for cybersecurity peers growing more than 10%, leaving significant room for multiple expansion if execution improves, the analyst noted.

He also pointed to the company’s Analyst Day scheduled for October as a potential catalyst since the cybersecurity firm could use the event to sharpen its messaging to investors. 

Wall Street Remains Bullish on Zscaler

While not nearly as bullish as KeyBanc, other Wall Street firms also expect ZS shares to rip higher in the back half of 2026.

The consensus rating on Zscaler sits at “Strong Buy” currently, with the mean price target of roughly $196 signaling potential for a near 10% rally in the months ahead.