Major U.S. Indices Mixed as Zscaler Shares Decline Amid Guidance Concerns
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Source: seekingalpha
- Market Performance: On Tuesday, major Wall Street indices finished mixed as investors assessed the potential for a resolution in the U.S.-Iran conflict, with the blue-chip Dow down 0.2%, the S&P 500 up 0.6%, and the tech-heavy Nasdaq Composite leading with a 1.2% gain.
- Zscaler Earnings: Zscaler's shares fell in after-hours trading despite reporting better-than-expected third-quarter results, with an adjusted EPS of $1.08 and revenue rising 25% year-over-year to $850.5 million; however, mixed guidance overshadowed these results, leading to investor disappointment.
- Medifast Leadership Change: Medifast appointed Nicholas Johnson as CEO effective June 1, 2026, succeeding Dan Chard, who will remain as chairman of the board; this leadership transition could impact the company's strategic direction and market performance moving forward.
- Firefly Aerospace Contract: Firefly Aerospace was awarded a $75 million subcontract from NASA's Jet Propulsion Laboratory to deliver four drones for NASA's MoonFall mission, although shares fell about 5% at the time of the announcement, this contract could support future business growth for the company.
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Analyst Views on ZS
Wall Street analysts forecast ZS stock price to rise
30 Analyst Rating
24 Buy
6 Hold
0 Sell
Strong Buy
Current: 182.370
Low
260.00
Averages
325.62
High
390.00
Current: 182.370
Low
260.00
Averages
325.62
High
390.00
About ZS
Zscaler, Inc. is a cloud security company. The Company has developed a platform incorporating core security functionalities needed to enable fast and secure access to cloud resources based on identity, context and an organization's policies. Its Zscaler Zero Trust Exchange is a cloud-native platform that securely connects users, devices, applications and workloads, including artificial intelligence (AI) agents, without relying on hub-and-spoke network architecture and firewall-centric security. It delivers its solutions using a software-as-a-service (SaaS) business model and sells subscriptions to customers to access its cloud platform, together with related support services. Its services include Zscaler Internet Access (ZIA), Zscaler Private Access (ZPA), and Zscaler Digital Experience (ZDX). ZIA provides secure access to externally managed applications, including SaaS applications and internet destinations, regardless of device, location or network.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Zscaler Reports Revenue Growth but Wider Loss in Q3
- Revenue Growth: Zscaler reported a revenue increase to $850.5 million for Q3 2026, up 25.1% from $678.0 million a year earlier, indicating strong performance amid rising market demand despite profitability challenges.
- Widening Net Loss: The company's net loss expanded to $13.9 million from $4.1 million last year, highlighting increased spending in sales and R&D, which may impact future profitability and investor confidence.
- Rising Expenses: Sales and marketing expenses rose to $371.9 million from $314.6 million, while R&D expenses increased from $169.8 million to $232.3 million, reflecting ongoing investments in market share expansion and technological innovation, though this may lead to short-term financial pressure.
- Stock Price Volatility: Zscaler's stock is currently trading at $150.00, down $34.60 or 18.74% on Nasdaq, indicating investor concerns regarding the company's financial performance, which could affect future funding and market confidence.
See More
Box and Zscaler Earnings Guidance Impact Stock Prices
- Box Earnings Performance: Box reported adjusted earnings of $0.37 per share and revenue of $306 million in Q1, surpassing analyst expectations of $0.36 and $304 million, but guided for full-year adjusted earnings of $1.56, below the $1.63 expected, causing a 2% stock drop.
- Zscaler Revenue Guidance Cut: Zscaler shares plummeted 16% after guiding current-quarter revenue between $875 million and $878 million, missing the $879 million forecast, despite reporting fiscal Q3 adjusted earnings of $1.08 per share, exceeding the $1.01 estimate.
- Semtech Stock Surge: Semtech's stock rose 8% after posting Q1 adjusted earnings and revenue that beat estimates, with guidance for current-quarter earnings, adjusted operating margin, and EBITDA also exceeding analyst expectations, indicating strong market performance.
- Insulet Device Correction Issue: Insulet's shares fell about 9% following the announcement of a voluntary correction for specific lots of its medical devices due to manufacturing issues that could lead to insulin under-delivery, impacting the company's reputation and market confidence.
See More
Zscaler Forecasts Q4 Revenue Below Estimates Amidst Rising Competition
- Revenue Forecast Downgrade: Zscaler's Tuesday earnings report indicates that fourth-quarter revenue is expected to fall below market estimates, signaling intensified competition in the cybersecurity market as enterprises scrutinize spending on cloud security products, leading to a 15% drop in shares during after-hours trading.
- Increased Market Competition: As demand for cybersecurity rises, Zscaler faces pressure from competitors, with enterprise clients becoming more cautious about investing in cloud security products, which could impact the company's market share and future growth potential.
- Significant Stock Reaction: The downgrade in revenue expectations resulted in a 15% plunge in Zscaler's stock price during after-hours trading, reflecting investor concerns about the company's future performance and potentially affecting its financing capabilities and market confidence.
- Need for Strategic Adjustment: In an increasingly competitive environment, Zscaler may need to reassess its market strategy and product pricing to maintain its competitiveness in the cloud security sector and attract more enterprise clients.
See More
Major U.S. Indices Mixed as Zscaler Shares Decline Amid Guidance Concerns
- Market Performance: On Tuesday, major Wall Street indices finished mixed as investors assessed the potential for a resolution in the U.S.-Iran conflict, with the blue-chip Dow down 0.2%, the S&P 500 up 0.6%, and the tech-heavy Nasdaq Composite leading with a 1.2% gain.
- Zscaler Earnings: Zscaler's shares fell in after-hours trading despite reporting better-than-expected third-quarter results, with an adjusted EPS of $1.08 and revenue rising 25% year-over-year to $850.5 million; however, mixed guidance overshadowed these results, leading to investor disappointment.
- Medifast Leadership Change: Medifast appointed Nicholas Johnson as CEO effective June 1, 2026, succeeding Dan Chard, who will remain as chairman of the board; this leadership transition could impact the company's strategic direction and market performance moving forward.
- Firefly Aerospace Contract: Firefly Aerospace was awarded a $75 million subcontract from NASA's Jet Propulsion Laboratory to deliver four drones for NASA's MoonFall mission, although shares fell about 5% at the time of the announcement, this contract could support future business growth for the company.
See More
Zscaler Reports Strong Q3 Earnings but Mixed Guidance Leads to Stock Drop
- Strong Earnings Performance: Zscaler reported an adjusted earnings per share of $1.08 for Q3 ending April 30, with revenue rising 25% year-over-year to $850.5 million, surpassing analyst expectations of $1.01 and $835.3 million, indicating robust performance in the cybersecurity sector.
- Annual Recurring Revenue Growth: The company achieved annual recurring revenue of $3.525 billion, reflecting significant growth compared to the previous year, showcasing its ability to attract new customers and expand its existing client base, which suggests strong long-term growth potential.
- Mixed Future Guidance: While Zscaler expects adjusted earnings per share between $1.08 and $1.09, exceeding the $1.03 anticipated by analysts, its revenue forecast of $875 million to $878 million falls short of the $878.6 million expected, which may dampen investor confidence.
- Cash Flow and Spending Outlook: The company anticipates a free cash flow margin between 22.8% and 23.3%, down from a prior expectation of 26.5% to 27%, primarily due to increased capital expenditures, which could impact future financial flexibility.
See More
Zscaler: An Emerging Winner in Cloud Security
- Earnings Preview: Zscaler is set to release its Q3 2026 earnings, with market expectations indicating continued strong double-digit growth, reflecting the company's sustained competitiveness and robust demand in the cloud security sector.
- Market Outlook: As demand for cloud security continues to rise, Zscaler is viewed as an attractive investment opportunity, particularly with the push from AI technologies expected to further enhance its market share and growth potential.
- Competitive Edge: Zscaler demonstrates significant growth potential in the cloud security market, especially when compared to competitors like CRM, SNOW, and DELL, showcasing its unique technological advantages and market positioning.
- Investor Interest: With the earnings release approaching, investor interest in Zscaler is increasing, and the market widely anticipates that the company will provide positive performance guidance, potentially driving stock price increases and bolstering investor confidence.
See More
Zscaler Reports Revenue Growth but Wider Loss in Q3
- Revenue Growth: Zscaler reported a revenue increase to $850.5 million for Q3 2026, up 25.1% from $678.0 million a year earlier, indicating strong performance amid rising market demand despite profitability challenges.
- Widening Net Loss: The company's net loss expanded to $13.9 million from $4.1 million last year, highlighting increased spending in sales and R&D, which may impact future profitability and investor confidence.
- Rising Expenses: Sales and marketing expenses rose to $371.9 million from $314.6 million, while R&D expenses increased from $169.8 million to $232.3 million, reflecting ongoing investments in market share expansion and technological innovation, though this may lead to short-term financial pressure.
- Stock Price Volatility: Zscaler's stock is currently trading at $150.00, down $34.60 or 18.74% on Nasdaq, indicating investor concerns regarding the company's financial performance, which could affect future funding and market confidence.
See More
Box and Zscaler Earnings Guidance Impact Stock Prices
- Box Earnings Performance: Box reported adjusted earnings of $0.37 per share and revenue of $306 million in Q1, surpassing analyst expectations of $0.36 and $304 million, but guided for full-year adjusted earnings of $1.56, below the $1.63 expected, causing a 2% stock drop.
- Zscaler Revenue Guidance Cut: Zscaler shares plummeted 16% after guiding current-quarter revenue between $875 million and $878 million, missing the $879 million forecast, despite reporting fiscal Q3 adjusted earnings of $1.08 per share, exceeding the $1.01 estimate.
- Semtech Stock Surge: Semtech's stock rose 8% after posting Q1 adjusted earnings and revenue that beat estimates, with guidance for current-quarter earnings, adjusted operating margin, and EBITDA also exceeding analyst expectations, indicating strong market performance.
- Insulet Device Correction Issue: Insulet's shares fell about 9% following the announcement of a voluntary correction for specific lots of its medical devices due to manufacturing issues that could lead to insulin under-delivery, impacting the company's reputation and market confidence.
See More
Zscaler Forecasts Q4 Revenue Below Estimates Amidst Rising Competition
- Revenue Forecast Downgrade: Zscaler's Tuesday earnings report indicates that fourth-quarter revenue is expected to fall below market estimates, signaling intensified competition in the cybersecurity market as enterprises scrutinize spending on cloud security products, leading to a 15% drop in shares during after-hours trading.
- Increased Market Competition: As demand for cybersecurity rises, Zscaler faces pressure from competitors, with enterprise clients becoming more cautious about investing in cloud security products, which could impact the company's market share and future growth potential.
- Significant Stock Reaction: The downgrade in revenue expectations resulted in a 15% plunge in Zscaler's stock price during after-hours trading, reflecting investor concerns about the company's future performance and potentially affecting its financing capabilities and market confidence.
- Need for Strategic Adjustment: In an increasingly competitive environment, Zscaler may need to reassess its market strategy and product pricing to maintain its competitiveness in the cloud security sector and attract more enterprise clients.
See More
Major U.S. Indices Mixed as Zscaler Shares Decline Amid Guidance Concerns
- Market Performance: On Tuesday, major Wall Street indices finished mixed as investors assessed the potential for a resolution in the U.S.-Iran conflict, with the blue-chip Dow down 0.2%, the S&P 500 up 0.6%, and the tech-heavy Nasdaq Composite leading with a 1.2% gain.
- Zscaler Earnings: Zscaler's shares fell in after-hours trading despite reporting better-than-expected third-quarter results, with an adjusted EPS of $1.08 and revenue rising 25% year-over-year to $850.5 million; however, mixed guidance overshadowed these results, leading to investor disappointment.
- Medifast Leadership Change: Medifast appointed Nicholas Johnson as CEO effective June 1, 2026, succeeding Dan Chard, who will remain as chairman of the board; this leadership transition could impact the company's strategic direction and market performance moving forward.
- Firefly Aerospace Contract: Firefly Aerospace was awarded a $75 million subcontract from NASA's Jet Propulsion Laboratory to deliver four drones for NASA's MoonFall mission, although shares fell about 5% at the time of the announcement, this contract could support future business growth for the company.
See More
Zscaler Reports Strong Q3 Earnings but Mixed Guidance Leads to Stock Drop
- Strong Earnings Performance: Zscaler reported an adjusted earnings per share of $1.08 for Q3 ending April 30, with revenue rising 25% year-over-year to $850.5 million, surpassing analyst expectations of $1.01 and $835.3 million, indicating robust performance in the cybersecurity sector.
- Annual Recurring Revenue Growth: The company achieved annual recurring revenue of $3.525 billion, reflecting significant growth compared to the previous year, showcasing its ability to attract new customers and expand its existing client base, which suggests strong long-term growth potential.
- Mixed Future Guidance: While Zscaler expects adjusted earnings per share between $1.08 and $1.09, exceeding the $1.03 anticipated by analysts, its revenue forecast of $875 million to $878 million falls short of the $878.6 million expected, which may dampen investor confidence.
- Cash Flow and Spending Outlook: The company anticipates a free cash flow margin between 22.8% and 23.3%, down from a prior expectation of 26.5% to 27%, primarily due to increased capital expenditures, which could impact future financial flexibility.
See More
Zscaler: An Emerging Winner in Cloud Security
- Earnings Preview: Zscaler is set to release its Q3 2026 earnings, with market expectations indicating continued strong double-digit growth, reflecting the company's sustained competitiveness and robust demand in the cloud security sector.
- Market Outlook: As demand for cloud security continues to rise, Zscaler is viewed as an attractive investment opportunity, particularly with the push from AI technologies expected to further enhance its market share and growth potential.
- Competitive Edge: Zscaler demonstrates significant growth potential in the cloud security market, especially when compared to competitors like CRM, SNOW, and DELL, showcasing its unique technological advantages and market positioning.
- Investor Interest: With the earnings release approaching, investor interest in Zscaler is increasing, and the market widely anticipates that the company will provide positive performance guidance, potentially driving stock price increases and bolstering investor confidence.
See More
