ZS, DOCU Stock Price Targets Rise, But Wall Street's Growth Debate Continues

• Analysts raised price targets across both stocks, but several maintained 'Neutral', 'Equal Weight' or 'Sector Perform' ratings.
• They continued to flag specific growth questions for both Zscaler and DocuSign.
• Morgan Stanley raised its DocuSign price target but said: "management still hasn't quantified pricing uplift or incrementality versus legacy eSignature migration."

Zscaler (ZS) stock declined, while DocuSign (DOCU) shares were little changed in early-morning trade on Friday, despite both companies reporting earnings beats, resulting in a slew of price target hikes from Wall Street. 

ZS stock fell nearly 5% in pre-market trade, while DOCU stock edged 0.7% lower. Both were among the top trending tickers on Stocktwits at the time of writing. 

Retail sentiment around Zscaler and DocuSign trended in 'extremely bullish' territory over the past day, with chatter increased to 'extremely high' from 'high' levels. 

DocuSign: Strong Quarter, Unanswered Questions

According to TheFly, analysts covering DocuSign raised their price target, but the ratings stayed largely cautious. 

RBC Capital lifted its target to $70 from $55 while keeping a 'Sector Perform' rating on the shares. It said the company "delivered strong Q2 results ahead of consensus across all metrics" with growing deal sizes, though RBC still views the stock as "fairly valued at current levels."

Morgan Stanley raised its target to $75 from $69 but kept an 'Equal Weight' rating on DOCU stock. According to the firm, the central unresolved question hanging over the stock is that "management still hasn't quantified pricing uplift or incrementality versus legacy eSignature migration." Citi echoed that hesitation, raising its price target on DOCU stock to $72 from $54 and keeping a 'Neutral rating. The firm said it wants "growth rates near double digits before recommending the shares."

Piper Sandler's Rob Owens, who raised his target to $75 from $52 with a 'Neutral' rating, said the quarter's strength "helped give management the confidence to raise annual ARR growth by 25 bps, now implying a 75bps acceleration vs. 2026." Owens cautioned that "visibility into a more material inflection remains elusive." 

Zscaler: A Bigger Beat, But Growth Durability in Question

Zscaler's results drew similar price target increases, citing real acceleration in the underlying business. RBC raised its target to $210 from $200 and kept an 'Outperform' rating on ZEC shares. It pointed to organic annual recurring revenue growth of 17%, up from 14% in the prior quarter, alongside AI security bookings up 50% quarter-over-quarter, with 70% of deals now including data security.

Stephens raised its target to $225 from $200 with an 'Overweight' rating. The firm called the quarter "clean and relatively uneventful compared to the last few quarters." It added that "dissipating sales leadership transition risks" set up a more positive outlook heading into fiscal 2027. 

Piper Sandler's Owens raised his Zscaler target to $175 from $160 but flagged the same durability concern he'd raised on DocuSign. According to him, Zscaler's fiscal 2027 guidance "implies organic NNARR growth of only 6% year-over-year, with execution still dependent on the sales leadership transition and ramp of newer products, leaving growth durability as a key debate." 

Morgan Stanley's note carried a similar tone, calling the beat "bigger than expected" while noting the company "is remaining conservative on its outlook given new sales leadership and Agentic SecOps product to be released during fiscal Q1." 

Zscaler, DocuSign Earnings Recap

Zscaler reported fourth-quarter (Q4) earnings of $1.19 per share, compared with the $1.09 consensus estimate on Koyfin. Revenue rose 25% year over year to $898.2 million, topping expectations of about $877 million.

DocuSign reported second-quarter (Q2) earnings of $1.16 per share, above the $1.08 consensus estimate, while revenue rose 9% to $875.7 million, compared with expectations of $867.2 million.

Across both stocks, analysts pointed to improvements in key metrics, but despite raising their price targets, most analysts maintained cautious ratings and continued to flag questions around the pace and durability of growth.

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