A short squeeze could keep the wind at ZS' back
Cloud stock Zscaler Inc (NASDAQ:ZS) was last seen up 7.6% at $270.32, after the company posted strong fiscal third-quarter results and raised its full-year forecast once again. Separately, the firm also announced the appointment of Kevin Rubin as the new Chief Financial Officer. The positive momentum has ZS brushing off a downgrade from Piper Sandler to "neutral" from "overweight," though no fewer than 18 analysts also lifted their price targets on the stock.
Today's pop has ZS trading at three-year highs and jumping above the $260 level, which rejected the shares earlier this week. The stock has been on a tear since late April, and is now up 50% in 2025.
Over in the options pits, 16,000 calls and 9,868 puts have been exchanged so far, which is quadruple the overall options volume typically seen at this point in a session. The weekly 5/30 275-strike call is the most popular, followed by the 300-strike call in the same series, with new positions opening at both.
During this rally, short interest has been building, up 21% in the two most recent reporting periods. The 8.73 million shares sold short now represents 9% of the stock's available float and it would take shorts 3.5 days to cover, at ZS' average pace of trading.