Zscaler Shares Drop as FY2027 Growth Guidance Overshadows Earnings Beat
Zscaler (NASDAQ:ZS) shares fell nearly 4% after the company issued weaker-than-expected fiscal 2027 revenue growth guidance of between 16.6% and 17.5%, a significant slowdown from its previous year's 25%. Despite reporting strong Q4 results, including $898.2 million in revenue (up 25%) and adjusted earnings per share that beat expectations, the muted outlook overshadowed these positives. The guidance was attributed to lapping contributions from Red Canary and led investors to question future growth potential. The cybersecurity sector saw broader weakness as CrowdStrike (NASDAQ:CRWD) shares dipped by about 1% in sympathy with Zscaler’s decline, while Palo Alto Networks (NASDAQ:PANW) remained flat. The S&P 500 ETF (SPY) declined slightly and the Nasdaq-100 ETF (QQQ) held steady, highlighting a relative underperformance of cybersecurity stocks compared to broader market indices. Zscaler plans two near-term events—an investor day on October 6 and a product launch on September 9—that could help reframe its growth narrative. However, the immediate reaction suggests that investors are prioritizing forward-looking guidance over recent earnings performance.
Tickers: $CRWD $PANW $QQQ $SPY $ZS
Topics: CrowdStrike cybersecurity Palo Alto Networks QQQ SPY Zscaler