Zscaler Stock Drops After Earnings, But Analysts See More Upside - Zscaler (NASDAQ:ZS)
Zscaler (ZS) shares fell after Q4 earnings, despite strong results and raised guidance. Analysts mostly maintained positive ratings, with price targets between $200 and $225. Key growth drivers included ZTE, Data Security, and new AI solutions. Organic NNARR growth accelerated to 17%, exceeding expectations.
How this was made
The 30-second read
Why it matters
Earnings beat and upgraded guidance could drive short‑term buying pressure, but the immediate price drop indicates market caution.
Market read
Zscaler’s strong earnings and guidance lift the cybersecurity sector, while the stock’s dip highlights short‑term volatility.
What to watch
Potential headwinds from slower enterprise IT spending and competition from larger cloud providers.
Background
Zscaler disclosed its Q4 2026 results, including ARR growth, non‑GAAP EPS, and raised FY27 guidance.
Ticker impact
Zscaler reported Q4 ARR of $3.771 bn, 25% YoY growth and raised FY27 ARR guidance to 17% YoY.
Potential upside of 5‑10% over the next week if guidance is digested.
Revenue and ARR beat expectations; analysts raised price targets, indicating bullish sentiment.
Market effects
Positive for the broader cybersecurity and zero‑trust segment as Zscaler’s AI‑driven offerings gain traction.
U.S. tech sector may see modest lift in after‑hours trading.
Reinforces demand for cloud security solutions worldwide.
Counterpoint
The stock fell on the day, suggesting investors may be pricing in execution risk for the new Red Canary integration.
Key entities
- companyZscaler Inc.
Cybersecurity firm reporting Q4 results.
- companyRed Canary
Acquired security firm now integrated into Zscaler’s offering.
