Zscaler Eyes Q4 Earnings, Guidance Expected
Zscaler Eyes Q4 Earnings, Guidance Expected
Anonymous
Key Points
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Zero Trust Everywhere adoption surpassed 700 customers in the latest quarter, up from 210 a year earlier, underscoring continued momentum in Zscaler's core security platform.
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Last quarter's revenue came in at $850.5 million, a 25.4% year-over-year increase, reflecting strong ARR momentum even before the latest guidance.
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Barclays analyst Saket Kalia raised the price target to $192 from $170 and kept a Buy rating ahead of the earnings print, signaling continued confidence in growth trajectory.
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Options traders are pricing in roughly a 12.8% one-day post-earnings move, slightly above the eight-quarter average of 11.35%, with the nearest strike at $172.50 and near-term volatility embedded in the setup.
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Insiders sold about $26.2 million worth of Zscaler shares over the past 12 months, with no reported insider purchases, highlighting ongoing insider-sentiment concerns despite the growth story.
Zscaler is set to report Q4 FY2026 earnings with expected EPS around $1.08 and revenue near $877 million, as investors closely watch forward guidance and margin trends ts2.tech. The stock has traded with mixed momentum in recent weeks, caught between strong fundamentals—including 700+ Zero Trust Everywhere customers, up from 210 a year ago—and sector-wide pressure that has also hit peers like Palo Alto Networks investors.com.
Options markets are pricing in a 12.8% one-day post-earnings move, slightly above the eight-quarter average of 11.35%, underscoring expectations of catalysts beyond the quarterly results investors.com. Meanwhile, GuruFocus valuation signals point to significant undervaluation versus a $294.37 GF Value, though insider selling of $26.2 million over the past 12 months tempers enthusiasm about near-term momentum.
Strong Quarterly Performance Masks Margin Concerns
Last quarter, Zscaler reported revenue of $850.5 million, a 25.4% year-over-year jump that demonstrated solid momentum even before the latest earnings investors.com. The company beat adjusted earnings expectations with $1.19 per share, a 22% increase investors.com. However, the initial after-hours surge of nearly 12% reversed sharply after cash-flow margin slipped to just 7%, raising questions about profitability sustainability ts2.tech.
Zero Trust Platform Accelerates Customer Adoption
Zscaler's core security offering gained traction with 700+ Zero Trust Everywhere customers in the latest quarter, more than triple the 210 customers from a year earlier. This surge shows strong momentum in the company's shift toward subscription-based ARR growth. The expansion underscores that enterprises continue adopting Zscaler's zero-trust security architecture as a strategic priority.
Analyst Confidence Persists Despite Stock Weakness
Barclays analyst Saket Kalia raised his price target to $192 from $170 and maintained a Buy rating ahead of earnings, signaling continued confidence in the company's growth trajectory investors.com. This vote of confidence comes even as the stock has struggled with sector-wide headwinds in cybersecurity. Kalia's upgrade reflects expectations of sustained ARR growth momentum despite near-term valuation and sentiment pressures.
Insider Selling and Valuation Tensions
Insiders sold approximately $26.2 million worth of Zscaler shares over the past 12 months with zero reported insider purchases, a bearish signal that contrasts with the growth narrative. GuruFocus estimates fair value at $294.37 per share, suggesting the stock trades at a steep discount. Yet this valuation gap, combined with insider exits and margin compression, raises concerns about whether the deep discount reflects genuine upside or hidden value-trap risks.
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