Zscaler (NASDAQ:ZS) shares gained more than 2% intra-day today after Macquarie analysts upgraded the company to Outperform from Neutral and raised its price target to $231.00 from $166.00.

The analysts highlighted Zscaler's Risk360 solution and its strategic position at the intersection of evolving cyber threat landscapes and SEC reporting requirements. This positioning, according to the analyst, bolsters a bullish outlook for the company.

To arrive at the new target price, the analysts employed a Discounted Cash Flow (DCF) method, which now values Zscaler at 13.8 times multiple of its expected Enterprise Value to Sales (EV/S). Further, the analysis of Zscaler was conducted using Macquarie's SaaS mature margin analysis framework. This evaluation led to the estimation that Zscaler could potentially achieve non-GAAP operating margins in the mid-40 percent range over the long term, indicating a strong financial performance outlook.