Zscaler's Q2 earnings soar 26% as Wells Fargo backs its growth potential
Zscaler has delivered strong financial results for its second quarter of fiscal 2026, beating market expectations. The cybersecurity firm reported a 26% year-over-year revenue increase and higher-than-expected earnings. Despite the positive performance, several analysts adjusted their price targets while keeping favourable ratings on the stock.
Wells Fargo recently began covering the company, offering an optimistic outlook on its future growth.
On March 3, 2026, Wells Fargo initiated coverage of Zscaler (NASDAQ: ZS) with an Overweight rating and a $200 price target. The firm highlighted the company's ability to attract new customers, estimating that around 700 new client logos each year could add between $300 million and $400 million in annual revenue.
Zscaler's Q2 fiscal 2026 results exceeded forecasts, with revenue rising 26% compared to the same period last year. Non-GAAP earnings per share came in at $1.01, well above the $0.86 consensus estimate. Following the announcement, multiple firms revised their price targets downward but kept their positive ratings intact.
The company has already secured 45% of the Fortune 500 and 40% of the Global 2000 as customers. Its penetration in enterprises with over 2,000 employees stands at around 20%. Wells Fargo believes recent concerns about competition from Red Canary present a buying opportunity for investors.
With roughly 6,200 employees at the time of Wells Fargo's analysis, Zscaler is expected to maintain stability in its core business. Growth in newer areas, such as Zero Trust Exchange, data security, and artificial intelligence, could support a 20% annual growth rate moving forward.
Zscaler's latest financial results and analyst coverage suggest continued confidence in its market position. The firm's expansion into emerging security segments, combined with its strong customer base, points to sustained revenue growth. Investors and industry watchers will likely keep a close eye on its performance in the coming quarters.
