Zscaler, Inc. (ZS) Presents at Morgan Stanley Technology, Media & Telecom Conference 2026 Transcript
Down as much as 55% from the peak to the trough and over 20% in 2026, it may be time to buy cybersecurity stocks like Palo Alto Networks NASDAQ: PANW and Zscaler NASDAQ: ZS. While valuation concerns plagued and may continue to plague these markets, their share prices are trading at long-term lows and unlikely to fall significantly further.
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 (ZS) stock has dropped by 23.8% in under a month, falling from $219.67 on January 27, 2026, to $167.36 at present. What lies ahead?
ZS tops Q2 estimates with 26% revenue growth and strong customer momentum, prompting the company to lift its full-year outlook.
Zscaler, Inc. (ZS) Q2 2026 Earnings Call Transcript
Zscaler (ZS) came out with quarterly earnings of $1.01 per share, beating the Zacks Consensus Estimate of $0.89 per share. This compares to earnings of $0.78 per share a year ago.
Zscaler has faced a significant stock decline amid SaaSpocalypse fears and investor reaction to its Q1 FY2026 results. Its AI Security business, including AI Guard and Agentic Operations, is positioned to monetize non-human users, mitigating SaaS seat-based risk. AI Security reached $400M ARR by Q1 2026, surpassing FY26 targets and establishing a new, rapidly growing revenue pillar.
Zscaler (ZS) is a compelling buy, trading at a compressed multiple, despite strong growth and a robust data moat in cloud security. ZS benefits from high gross retention, rapid AI/data security expansion, and dominant positioning in AI-agent security, following recent acquisitions. Short-term margin pressure and dilution from acquisitions are outweighed by long-term operating leverage and accelerating revenue growth.
ZS gears up for Q2 earnings with revenues seen up 23% and AI security demand in focus, but tight IT budgets and slower legacy growth loom.
Zscaler Q2 Earnings Preview: What To Watch And Why AI Fears Are Overblown
Zscaler faces mounting competitive pressures, lagging Cloudflare in RPO growth and Net Retention, while Palo Alto Networks picks up momentum with its M&A-based strategy. Despite solid revenue and customer growth, ZS's stagnant operating margin and softer forward guidance have weighed on investor sentiment. ZS trades at a forward P/E of 45, compressing to 30 by FY 2028, but market fears over share losses demand outperformance in RPO and retention.