Zscaler shares slump as revenue forecast misses estimates

Palo Alto Networks

27/05/2026 09:20

** Shares of cloud security firm Zscaler ZS.O fall 21.5% to $144.80 premarket
** Co on Tuesday projected Q4 revenue below analysts’ estimates, pointing to intensifying competition in the cybersecurity sector as enterprises tighten spending on cloud security products
** Co faces competition from larger rivals like Palo Alto Networks PANW.O, which are vying for market share with their own platform offerings
** BTIG says competition is increasingly weighing on Zscaler's growth outlook, and commentary on new customer wins is likely to deepen those concerns
** Zscaler reported revenue of $850.5 million for Q3, above estimates of $835.4 million 
** Following the results, at least 18 brokerages cut price target on the stock, according to data compiled by LSEG
** Forty of 50 brokerages rate the stock "buy" or higher and 10 "hold"; their median PT is $200 - LSEG-compiled data
** Stock trades at 41x fwd earnings vs its 5-yr avg of 133x, per LSEG data, suggesting it may be undervalued
** Shares have fallen about 17.9% YTD, compared with a 14.7% rise for the Nasdaq .IXIC


 (Reporting by Kanishka Ajmera in Bengaluru)
 ((mail to: Kanishka.Ajmera@thomsonreuters.com))