Zscaler shares plunge 31% after weak FY2027 guidance overshadows strong Q3 results
By
Samantha Subin
A respectable bake. You'd come back tomorrow for another.
Summary
Zscaler's stock dropped over 30% in its worst trading day ever after the cybersecurity company issued weak guidance for FY2027, projecting 16-17% annual recurring revenue growth (below StreetAccount estimates). While Q3 results beat expectations, the company's Q4 revenue forecast of $875-878 million slightly missed the $878.6 million FactSet estimate. Zscaler has lost half its market value over the past year.
Key quotes
· 5 pulledZscaler's stock plummeted more than 30% on Wednesday for its worst day ever after issuing underwhelming guidance that overshadowed better-than-expected fiscal third-quarter results.
The cybersecurity company guided for 16% to 17% year-over-year annual recurring revenue growth for the 2027 fiscal year, falling short of StreetAccount estimates.
Zscaler expects $875 million to $878 million in revenue this quarter, coming up slightly short of the $878.6 million expected by FactSet.
Zscaler projected ARR of $3.74 billion to $3.75 billion in FY2026, or year-over-year growth of approximately 24%.
Zscaler has shed half its value over the last year.
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