ZS earnings and outlook

Zscaler (ZS), a leading cybersecurity firm, reported fiscal Q3 results that beat analyst estimates, raising revenue and ARR targets for 2026. However, management's guidance for decelerating growth to 16-17% next year sent shares tumbling, with the stock down over 40% in 2026.

The cybersecurity sector is affected, with Zscaler's struggle to add new customers raising concerns about growth prospects. The stock's valuation has become attractive, but investors remain cautious.

Investors should watch Zscaler's fiscal Q4 results, due in late May, for further clarity on customer acquisition and growth. Additionally, any updates on the company's strategic initiatives, such as its zero-trust architecture, will be crucial in determining the stock's trajectory.