Zscaler (ZS) is being "overly cautious" with its guidance raise, Macquarie Equity Research said in a Thursday note.

The company delivered a "robust" Q4, driven by large deal activity, improving sales productivity, momentum from Z-Flex program, and growing adoption of non-seat-based offerings, which contributed about 30% of new and upsell annual contract value for the quarter, Macquarie analysts said.

Significant drivers supporting Zscaler's fiscal 2027 outlook are improving sales productivity, stronger large-deal activity, and traction across its platform strategy, according to the note. The company flagged Q3 sales executive departures and uncertainty about its new Agentic SecOps solution with integrated Red Canary technology as concerns that warranted caution.

The company's conservative guidance "seems sensible," but the analysts said they wanted to see a healthier guidance raise, based on its consistent net revenue retention of 115% and its net new annual recurring revenue acceleration across fiscal 2026.

Macquarie maintained the company's stock rating at outperform and increased the price target to $200 from $172.

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