Shares of Zscaler (ZS 0.74%) have soared by an eye-popping 51% in 2025 so far, bucking the pessimism in the broader market that was triggered by simmering global trade tensions. The cybersecurity giant continues to deliver spectacular financial results, beating its own expectations and consistently raising its forward guidance.

With that said, Zscaler stock is still down 25% from the all-time high it set during 2021's tech sector frenzy. But the company is rapidly expanding its Zero Trust Exchange platform, which is attracting new customers and creating more opportunities to generate revenue. As a result, its stock is starting to look like a great long-term buy.

Wall Street thinks Zscaler stock will continue to recover. The majority of the analysts tracked by The Wall Street Journal who cover the stock have assigned it their highest buy rating, and none recommend selling. Here's why the Street is right to be optimistic.

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Zscaler is rapidly expanding its Zero Trust Exchange

Zscaler has built a comprehensive cybersecurity solution around the "zero-trust" concept, which treats all participants in a local or cloud network as potentially hostile, and requires them to perform regular verifications to confirm that they are legitimate. It's the perfect type of architecture for modern organizations that may have employees accessing systems from across the country or around the world, and also for businesses with multiple locations outside of their headquarters.

The Zero Trust Exchange offers several layers of protection. At the identity layer, it analyzes every employee's location and device when they make a login attempt, which helps determine whether it's really them, or if their credentials have been stolen. Plus, a zero-trust system limits users' access to only the digital applications and systems they are specifically authorized to use (the ones they actually need for their job), so even if a hacker bypasses the identity layer, they won't have access to an organization's entire network.

Zscaler released a new arm of its platform last year called Zero Trust Branch. It allows businesses to run the connections for every device, production facility, and warehouse through the Zero Trust Exchange, so each branch of a network operates in isolation from the rest of it. Therefore, even if one of them faces an attack, the impact won't spread to the rest of the business.

Branch helps Zscaler achieve its goal of creating a "zero trust everywhere" environment for its customers, and they are definitely warming up to the concept. As of April 30, the end of its fiscal 2025 third quarter, Zscaler said 210 of its customers had adopted the zero trust everywhere approach, which was a whopping 60% increase from the year-ago period. The company has around 8,650 customers overall, so it has a long runway for growth on that front.

Zscaler just boosted its fiscal 2025 revenue guidance -- again

Zscaler generated $678 million in revenue during its fiscal 2025 third quarter. That was a 23% increase from the year-ago period, and it was also comfortably above management's $665 million to $667 million guidance range.

The strong result prompted management to increase its full-year forecast for fiscal 2025 for the third time. It now expects to generate $2.66 billion in revenue at the midpoint of its guidance range, compared to $2.647 billion previously.

Zscaler also made progress at the bottom line. Despite losing $4.1 million on a GAAP (generally accepted accounting principles) basis during the quarter, it generated net income of $136.7 million on a non-GAAP basis, which was a year-over-year jump of 20.7%. Net income is the company's preferred measure of profitability because it excludes one-off and non-cash expenses like stock-based compensation, so it's a better indicator of how much actual money the business is generating.

Wall Street is bullish on Zscaler stock

The Wall Street Journal tracks 47 analysts who cover Zscaler stock, and 29 of them have assigned it a buy rating. Four others are in the overweight (bullish) camp, while the remaining 14 recommend holding. None of the analysts recommend selling.

With that said, their average price target for the stock is $285.98, which implies a potential upside of just 3.7% over the next 12 to 18 months from where it is trading as of this writing. The Street-high target is $323, which suggests the stock could climb by 17.1%, but its potential upside certainly appears limited after its 51% gain so far this year.

However, investors should focus on the longer term. Zscaler views its addressable market as being worth $96 billion, so it has barely scratched the surface of its total opportunity. Plus, the company's remaining performance obligation (RPO) soared by 30% to $5 billion during the third quarter. RPO represents the revenue a company can expect to book based on its existing contracts with customers. Since it grew at a faster rate than Zscaler's revenue rose during the quarter, that suggests an acceleration in top-line growth is in the cards.

Therefore, Zscaler stock might be a great buy while it's still down 25% from its all-time high, especially for investors who can hold it for a long-term period of five years or more.