Zscaler Shares Soar! Is This the New Golden Snitch for Investors?

Accio Profits! Wells Fargo Waves Its Wand

Right listen up folks! It seems even Muggles in the financial world are starting to see the light – or maybe they've just had a swig of Felix Felicis. Wells Fargo bless their cotton socks has upgraded Zscaler. Yes *that* Zscaler the cloud security lot. They've gone from 'meh' to 'Merlin's beard buy it!' Shares have already zoomed up 67% this year which is faster than a Firebolt on a good day. And apparently some bloke named Andrew Nowinski thinks they'll jump another 28%. Blimey even Ron would be tempted to invest and we all know how he is with money... remember those Chocolate Frog cards?

Scheduled Billings: The New Sorting Hat?

Nowinski – sounds like a dodgy potion ingredient doesn't it? – reckons the scheduled billings whatever those are should be less of a headache next year. Apparently unscheduled billings are doing quite nicely thank you very much. All this gobbledegook supposedly means Zscaler is on track for 20%+ billings growth. It's like Snape finally giving Gryffindor house points – completely unexpected and potentially game changing!

$5 Billion ARR: More Galleons Than Gringotts!

If Zscaler keeps up their mid teens growth they're supposedly headed for a whopping $5 billion in Annual Recurring Revenue by 2027. That's enough to make even Malfoy's eyes water! All those Galleons could probably buy out Quality Quidditch Supplies... or maybe just a lifetime supply of Bertie Bott's Every Flavor Beans. Just try to avoid the earwax flavor yeah?

Margins Expanding Faster Than a Swelling Solution

Apparently Zscaler is also expanding its free cash flow and operating margins. Now I'm no Hermione Granger when it comes to numbers but even *I* understand that's a good thing! It's like doubling the power of your Patronus – more effective and definitely less likely to be eaten by a Dementor. In the third quarter of 2023 Zscaler laid out some long term targets for margins. The company is now at or above all three long term targets and they even reiterated those targets in the most recent investor deck in May 2025. Nonetheless they believe there is upside to both the operating and free cash flow margin targets going forward.

Undervalued Treasure: Time to Snatch It Up?

Nowinski Who Sounds Like A Potion (sorry I had to) thinks these investment points make Zscaler shares look rather appealing. In fact he reckons the stock could jump another 28%. Apparently even though Wells Fargo likes the company's valuation analysis they believe the shares are undervalued relative to other top notch stocks. As the company is following a similar path to $5B in ARR as CrowdStrike they see room for further multiple expansion. If Zscaler hits that $5 billion mark in a couple of years they think the shares will trade like CrowdStrike. Time to grab a broomstick and get in on this action eh?

CrowdStrike: The New Standard or Just a Fancy Niffler?

The analyst adds that he thinks the stock is undervalued relative to best in class stocks and he sees room for expansion as the company is following a similar path to $5B in ARR as CrowdStrike. If Zscaler can reach $5B in ARR over the next ~2.5 years (by FY27) the analyst believes shares will begin to trade at parity with CRWD. I'm not sure I completely understand all of that but it sounds like good news. All I know is if there's a chance to make a bit of extra dosh I'm not going to argue. After all one can never have too many Galleons can one?