Significant capital is moving into Zscaler (ZS) options, signaling that institutional players or high-net-worth individuals are positioning themselves for volatility. This surge in unusual trading activity, tracked by Benzinga’s options scanner, comes just as the San Jose-based cybersecurity firm prepares to release its quarterly financial results later this month.
Whale Activity and Market Sentiment
Benzinga’s tracking tools identified 16 uncommon options trades for Zscaler today, a volume of activity that typically suggests insiders or institutions anticipate a major move. While the identity of these traders remains anonymous, their footprint is distinct. The sentiment among these large-scale traders is mixed but leans slightly bullish: 43% are betting on an upside, compared to 37% taking a bearish stance.
A closer look at the liquidity reveals where the conviction lies. Of the special options uncovered, the split was even in volume—eight puts and eight calls—but the capital allocation tells a different story. The total value of the call options stood at $580,004, significantly outweighing the $263,616 placed on puts. This discrepancy suggests that while hedging is active, the “smart money” is putting more cash behind a potential rally.
Price Action and Technical Setup
Market movers have been focusing their attention on a specific price band for Zscaler, ranging between $200.00 and $240.00 over the last three months. Currently, the stock is trading within this channel at $216.11, up 3.1% on a volume of roughly 745,000 shares.
Technical indicators suggest the stock has room to run in either direction without being overextended; the Relative Strength Index (RSI) is currently sitting in neutral territory, showing neither overbought nor oversold conditions.
Earnings Outlook: A Shift to Profitability
The catalyst for this intensified trading appears to be Zscaler’s upcoming earnings announcement. The company is projected to open its books for the quarter ending January 31, 2026, on February 26, 2026. Expectations are high, with analysts forecasting a dramatic swing to profitability compared to the same period last year.
According to consensus estimates from 40 analysts, Zscaler is expected to report earnings per share (EPS) of $0.895. This represents a massive turnaround from the loss of $0.050 per share reported in the prior-year quarter.
Revenue projections are equally robust. The street expects a 23.27% year-over-year increase, forecasting revenue of $798.7 million, up from $647.9 million in the previous year. Looking at the broader fiscal picture, confidence remains strong: 44 analysts project full-year EPS of $3.81 (compared to a loss of $0.27 previously) and total revenue hitting $3.30 billion.
Analyst Ratings and Company Profile
Wall Street remains generally optimistic about the cloud security provider. Four market experts recently issued ratings with a consensus price target of $288.75, implying significant upside from current levels.
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Citigroup maintains a Buy rating with a high-water mark target of $305.
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Keybanc holds an Overweight rating, targeting $300.
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RBC Capital continues to rate the stock as Outperform.
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Piper Sandler remains the most conservative, holding a Neutral rating with a $260 price target.
Zscaler, which went public in 2018, operates as a software-as-a-service (SaaS) firm specializing in cloud-native cybersecurity. Its core platform is divided into Zscaler Internet Access, securing external application usage, and Zscaler Private Access, covering internal networks. As the earnings date approaches, investors will be watching closely to see if the company’s performance justifies the bullish flows in the options market.