Key Stats for Zscaler Stock
- 52-Week Range: $115 to $337
- Current Price: $156
- Street Mean Target: $195
- Street High Target: $250
- Analyst Consensus: 39 Buys / 8 Holds / 0 Sells
- TIKR Model Target (Jul. 2030): $292
Zscaler Stock Tumbles 31% on a Soft Q4 Guide, but the Earnings Story Has Not Changed
Zscaler (ZS) dropped 32% on May 27 after the cloud security firm issued Q4 revenue guidance that landed just below analyst expectations, sending shares to their lowest level in years following an already painful year-to-date selloff.
The guide was tight. Management projected Q4 revenue between $875 million and $878 million, roughly in line with the Street but below the consensus mean of $878.6 million, reflecting a deliberate decision to build in cushion around two mid-level sales leadership departures under CRO Mike Rich.
The business itself told a different story.
Q3 revenue of $850.5 million grew 25% year over year and beat consensus by $15 million. Non-GAAP EPS of $1.08 rose 29% year over year, beating the Street estimate of $1.01. ARR hit $3.53 billion, up 25%, with net new ARR of $166 million growing 24%.
Operating leverage was the headline the market missed. Non-GAAP operating margin reached an all-time high of 23%, up 140 basis points year over year. CEO Jay Chaudhry described the macro setup in terms that most security vendors can only aspire to: “We’ve never seen so many inbound calls come in so quickly.”
The catalyst is Mythos, Anthropic’s frontier AI model, which is surfacing security vulnerabilities across enterprise systems at machine speed and multiplying existing unpatched exposures by as much as 10x. Chaudhry was direct on Q3 2026 earnings call: “We feel like it’s a [4.0-like] moment. Zero Trust has never been more important than it is today.”
The platform momentum backs that up. Data security ARR crossed $500 million, up over 30% year over year. Zero Trust Branch ARR approximately tripled year over year. The company exited Q3 with more than 700 Zero Trust Everywhere enterprises, up from 550 the prior quarter. Z-Flex, the company’s flexible multi-year commitment program, generated over $480 million in total contract value in Q3 alone, up over 60% quarter over quarter.
39 Analysts Hold Their Buy Ratings on ZS Stock. The EPS Trajectory Is Why
The Street’s reaction to the Q4 guide was swift: at least 18 brokerages cut price targets on Zscaler stock in the 24 hours following results. Berenberg led the cuts, dropping its target from $320 to $200. Morgan Stanley moved to $145. Citigroup cut to $175.
The consensus, though, did not break.
As of June 1, 39 analysts rate Zscaler stock a buy or outperform, 8 rate it a hold, and none rate it a sell. The Street mean target sits at $195, implying around 25% upside from the current price of $156. The Street high target is $250.
In Q3, Zscaler reported normalized EPS of $1.08, up 29% year over year. The Street projects Q4 EPS of $1.08 to $1.09, implying continued 29% to 30% year-over-year growth even in a quarter management deliberately soft-guided. Normalized EPS compounds toward $1.16 by April 2027, a trajectory that reflects a business with durable operating leverage, not a vendor in structural decline.
Organic net new ARR, excluding the Red Canary acquisition, grew only 14% year over year in Q3, and management guided organic net new ARR growth for the full year at around 9.5%. New logo growth has underperformed, by management’s own admission. If that momentum does not recover in fiscal 2027, the EPS compounding story depends entirely on upsell, and upsell has a ceiling.
Management’s fiscal 2027 guidance commentary at the Baird Global Consumer Technology and Services Conference on June 2 and the Bank of America Global Technology Conference on June 3 is the next number to watch.
Zscaler Stock Earns More Per Share Than Cloudflare and Is Closing the Gap on Palo Alto
Zscaler’s normalized EPS of $1.08 in the April 2026 quarter sits above Palo Alto Networks’ $0.80 for the same period, and nearly five times Cloudflare’s $0.23.
The gap widens on the forward trajectory. Street estimates project Zscaler reaching $1.22 in normalized EPS by July 2027, against Palo Alto (PANW) at $0.96 and Cloudflare (NET) at $0.35 for the same period, meaning Zscaler’s per-share earnings compounding is outpacing both named rivals even as the market prices the stock at a steeper discount than either.
That is the mispricing in plain terms. Cloudflare trades at a premium multiple despite generating roughly a quarter of Zscaler’s earnings per share, while Zscaler stock sits near the bottom of its own historical valuation range on an EPS trajectory that the peer set has not matched.
Is Zscaler Stock Undervalued in 2026? TIKR’s $292 Base Case Says the Selloff Has Overshot
TIKR’s base case values Zscaler stock at approximately $292 by July 2030, implying around 88% total return from the current price of $156, or roughly 16% annualized over approximately four years.
If Zscaler sustains revenue growth compounding at around 18% annually and net income margins expand toward roughly 21%, the mid case stock price reaches approximately $524 by 2034, implying around 237% total return at an IRR of roughly 16%.
If the organic ARR deceleration the bears are pricing proves correct and growth steps down toward the low case, the model still points to a stock price of approximately $369 at an IRR of around 11%.
Only the bear thesis, where multiple compression continues and the AI demand cycle fails to convert into new logos at scale, leaves the current price looking rich.
What happened to Zscaler stock?
Zscaler stock fell 31.5% on May 27 after the company issued Q4 revenue guidance of $875 million to $878 million, just below analyst consensus, while citing two mid-level sales leadership departures as a reason to build extra conservatism into the near-term outlook.
Q3 results were strong: revenue grew 25% to $850.5 million, normalized EPS rose 29% to $1.08, and non-GAAP operating margin hit an all-time high of 23%.
Is Zscaler stock a buy right now?
39 of 47 analysts with active ratings on Zscaler stock rate it a buy or outperform, with a Street mean target of $195 implying around 25% upside.
TIKR’s base case target is approximately $292, implying roughly 88% total return over approximately four years.
The key variable: whether the AI-driven demand cycle CEO Jay Chaudhry described translates into new logo acceleration in fiscal 2027.
Should You Invest in Zscaler, Inc.?
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