Barclays Sees Long-Term Upside in Zscaler (ZS) With Strong Revenue Retention

Zscaler Inc. (NASDAQ:ZS) ranks among the best stocks to buy now for long-term growth. On February 13, Barclays raised Zscaler Inc. (NASDAQ:ZS) from Equalweight to Overweight while dropping its price target to $228 from $264. Barclays recognizes Zscaler’s outstanding net revenue retention rate of over 115%, which was made possible by strong up-selling and cross-selling efforts, and considers artificial intelligence as a potential benefit instead of a concern for the company.

The firm had originally downgraded Zscaler Inc. (NASDAQ:ZS) back in December 2025 after the company’s fiscal first-quarter 2026 earnings report, expressing concerns about growth stability and growing rivalry threat from market competitor Cloudflare, which threatens new client acquisition.

According to Barclays, Zscaler’s new customer growth contribution has dropped significantly from roughly two-thirds to about 30%. The firm thinks this might eventually limit the company’s ability to grow net revenue as growth among current customers hits its inherent limits.

Zscaler Inc. (NASDAQ:ZS) is a cloud-based security company that provides cybersecurity solutions by protecting user access to applications and data, regardless of location.

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