B. Riley Securities upgrades ZS from Neutral to Buy

The Rating Action

B. Riley Securities upgraded Zscaler, Inc. (ZS) from Neutral to Buy on 2026-05-18. The $28.1B cloud security stock closed at $174.69 per share, following an 8.47% intraday gain on May 19 after the rating was made public.

Coverage Consensus & Context

As of 2026-05-01, the broader analyst coverage pool for ZS included 49 total published ratings, split 8 Strong Buy, 32 Buy, 9 Hold, 0 Sell, and 0 Strong Sell. B. Riley’s upgrade moves the firm from the 9-member Hold (Neutral) cohort to the majority Buy/Strong Buy camp, aligning its call with 81.6% of covering analysts. Prior to this action, the consensus rating distribution held steady for three consecutive months (February, March, and April 2026) with no material shifts in the number of assigned ratings.

Cross-Reference to Fundamentals & Insider Activity

Zscaler has delivered two consecutive quarterly earnings beats ahead of this rating upgrade: its 2026-02-26 quarterly report posted adjusted EPS of $1.01 versus consensus estimates of $0.894, and total revenue of $815.75M versus consensus $798.33M. Separately, executive officers and directors sold a combined $2.54M in ZS shares during March 18-19, 2026, per SEC Form 4 filings. Notable transactions include CEO & Chairman Chaudhry Jagtar Singh’s $303,947 sale of 1,941 shares at $156.5932, Chief Revenue Officer Michael Rich’s $492,799 sale of 3,147 shares, and Chief Legal Officer Robert Schlossman’s $354,370 sale of 2,263 shares. Institutional ownership data as of 2025-12-31 shows 53.8% of the float held by 957 institutional investors, with 457 increasing their positions and 309 reducing their holdings in the final quarter of 2025.

Unstated Implications of the Rating Change

This upgrade does not include three key unstated details: first, no explicit price target was disclosed for ZS in the public rating announcement. Second, the rating does not account for the upcoming May 26, 2026 quarterly earnings report, which has consensus revenue estimates of $835.6M with no actual EPS results yet reported. Third, the action does not signal B. Riley’s own institutional position shift for ZS, as the most recent available 13F filing for the firm covers positions through 2025-12-31, and no post-upgrade position disclosures have been provided. Finally, the rating change does not reflect the May 19 intraday price movement, which occurred after the rating was publicly released.