These Analysts Revise Their Forecasts On Zscaler Following Q4 Results

Zscaler Inc. (ZS) reported better-than-expected fourth-quarter fiscal 2025 results, with revenue of $719.23 million and adjusted EPS of $0.89, both surpassing consensus estimates. Crucially, the company issued robust guidance for Q1 and full-year FY26, significantly exceeding analyst expectations for both revenue and earnings, citing strong demand for its Zero Trust and AI security solutions. Despite this strong financial performance and outlook, ZS shares declined 4.5% post-earnings, though several analysts subsequently raised their price targets, indicating continued confidence in the stock.

Analysis

Zscaler, Inc. (ZS) delivered a significant top- and bottom-line beat for its fourth fiscal quarter of 2025, with revenue of $719.23 million and adjusted EPS of $0.89 surpassing consensus estimates of $706.91 million and $0.80, respectively. The company's forward-looking guidance was exceptionally strong, projecting fiscal 2026 revenue between $3.27 billion and $3.28 billion, which is substantially above the $2.66 billion analyst consensus. Similarly, full-year adjusted EPS guidance of $3.64 to $3.68 far exceeds the $3.18 estimate. Management attributes this robust outlook to strong demand for its Zero Trust and expanding AI security solutions. Despite this fundamentally positive report, the stock experienced a notable disconnect, falling 4.5% to $262.19 in the subsequent trading session. This negative price action contrasts sharply with the overwhelmingly bullish reaction from analysts, a majority of whom reiterated buy-equivalent ratings and raised their price targets, with several targets now in the $330-$350 range.

Key Decisions for Investors

• The significant disconnect between the stock's 4.5% decline and the company's exceptionally strong fiscal 2026 guidance could present a tactical buying opportunity for long-term investors.
• Investors should consider the post-earnings share price drop as a potential case of profit-taking in a high-valuation name, as the fundamental results and overwhelmingly positive analyst price target revisions suggest strong underlying business momentum.
• Given the company's robust demand and strategic focus on AI security, investors might view Zscaler as a core holding for exposure to the secular growth trends in cybersecurity, anchored by a guidance that significantly outpaces prior expectations.