Zscaler Stock Surges on Beat-and-Raise, Bull Notes

Zscaler Inc (NASDAQ:ZS) stock is up 5.2% to trade at $206.63 at last check, after the cloud company shared better-than-expected results for its fiscal second quarter and lifted its full-year outlook. Analysts are chiming in, with Rosenblatt Securities upgrading the stock to "buy" from "neutral," and raising its price target to $235 from $190. Another 11 firms lifted their price objectives as well.

Coming into today, 12 of the 39 firms in coverage called ZS a "hold" or worse, indicating there's still room for upgrades. The security also looks ripe for a short squeeze, with short interest up 28.4% over the last two reporting periods, making up 6.1% of its available float.

ZS is today pacing for its third-straight daily gain and looking to add to its 25% six-month lead. Shares could conquer overhead pressure at their 60-day moving average as they stage a bounce off the $185 level, which acted as resistance for most of January.

At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), ZS sports 50-day call/put volume ratio ratio of 2.99 that ranks higher than 96% of annuals readings. This suggests a strong bullish bias in the options pits.

Straight out of the gate, 18,000 calls and 11,000 puts have exchanged hands, 5 times the intraday average volume. Positions are being sold to open at most popular contract, the weekly 3/7 210-strike call.