ZS nears a 52-week low as FY27 guidance signals slower growth, but AI security bookings, platform gains and a lower P/S support holding.
Zscaler (NASDAQ: ZS | ZS Price Prediction) founder and CEO Jay Chaudhry used the company's latest earnings call to sharpen a thesis becoming the bull case for cybersecurity: autonomous AI agents will soon outnumber human users on corporate networks, and each needs security.
ZS is expanding security to protect AI agents as ARR and revenues rise 25% each, and AI Protect logs above $100M bookings in 12 months for AI agents.
The average of price targets set by Wall Street analysts indicates a potential upside of 25.3% in Zscaler (ZS). While the effectiveness of this highly sought-after metric is questionable, the positive trend in earnings estimate revisions might translate into an upside in the stock.
Zscaler (ZS) is looking like an interesting pick from a technical perspective, as the company reached a key level of support. Recently, ZS broke out above the 50-day moving average, suggesting a short-term bullish trend.
I rate Zscaler a Strong Buy. The forward P/E appears elevated only because the company prioritises growth investment over short-term margin expansion. Generating a 36% free cash flow margin and operating at the "Rule of 62" already places Zscaler among the highest-quality compounders in software. Zscaler is a leader in Zero Trust cloud security, a category that has evolved from best practice to regulatory requirement in the US and EU, creating a structural tailwind.
Shares of Zscaler surged on Monday after Guggenheim upgraded the cybersecurity company to Buy from Neutral, arguing that the recent selloff has created an attractive entry point for investors despite ongoing concerns about growth. Zscaler shares climbed 10% to $154.11, extending a rebound that put the stock on track for its third consecutive daily gain.
Investors often turn to recommendations made by Wall Street analysts before making a Buy, Sell, or Hold decision about a stock. While media reports about rating changes by these brokerage-firm employed (or sell-side) analysts often affect a stock's price, do they really matter?
Zscaler (ZS) has received quite a bit of attention from Zacks.com users lately. Therefore, it is wise to be aware of the facts that can impact the stock's prospects.
Zscaler, Inc. plunged 32% after Q3 earnings, despite beating consensus on both revenue and EPS, due to softer-than-expected revenue growth guidance for 2027 and higher AI CapEx. ZS posted robust Q3 results: $850.5M revenue (+25% Y/Y), 81% gross margin, $196M operating income (+33% Y/Y), and $136M free cash flow (+14% Y/Y). The ZS stock selloff was amplified by management guiding for a lower revenue growth rate of 16-17% in FY 2027 vs. market expectations of 19-20% growth.
Zscaler has been tapped as a favorite cybersecurity stock by some analysts, but investor optimism seems to have unraveled Wednesday after the company's outlook for revenue in the current quarter fell short of expectations.
ZS' Q3 beat on EPS and revenues as Zero Trust demand and larger enterprise deals lift ARR, RPO and prompt higher FY26 guidance.