Zscaler (ZS) Declines More Than Market: Some Information for Investors

Zscaler shares slid 1.51% to $294.92, underperforming major indices, as investors position ahead of the company’s Nov. 25, 2025 earnings print; Q3 consensus calls for EPS of $0.85 (+10.4% year/year) and revenue of $773.35 million (+23.2%). For the full fiscal year analysts project EPS of $3.66 and revenue of $3.27 billion (up roughly 11.6% and 22.3%, respectively), while the Zacks Rank sits at Hold (#3). Valuation looks stretched relative to peers — forward P/E ~81.7 and PEG ~4.47 versus industry averages of ~68 and PEG 2.64 — so near-term stock performance will likely hinge on whether upcoming results validate the growth assumptions.

Analysis

Zscaler closed the most recent session at $294.92, down 1.51% and underperforming the S&P 500 which fell 0.92%; the stock has declined 0.27% over the past month while the Computer & Technology sector rose 1.64% and the S&P 500 rose 1.48%, indicating relative weakness into the company's upcoming report. Investors are focused on the company’s Nov. 25, 2025 earnings release where consensus calls for Q3 EPS of $0.85 (up 10.39% year-over-year) and revenue of $773.35 million (up 23.15%), with full-fiscal estimates at $3.66 EPS (+11.59%) and $3.27 billion revenue (+22.3%); the Zacks Consensus EPS estimate has been steady over the past month and the stock carries a Zacks Rank of #3 (Hold). Valuation is stretched relative to peers: forward P/E of 81.74 versus the industry average of 67.98 and a PEG of 4.47 compared with the Security industry PEG of 2.64, while the Security industry ranks in the top 20% by Zacks Industry Rank (49). Given mixed sentiment (score ~0.05) and a modest market-impact signal (0.3), the near-term share movement is likely to hinge on whether the upcoming results and guidance validate the above-consensus revenue growth assumptions; a miss would likely pressure the premium multiple, while an upside surprise could underpin further re-rating.

Key Decisions for Investors

• Await the Nov. 25 earnings release before initiating new long positions and require revenue and EPS beats or raised guidance to justify the current premium forward P/E
• If you hold a material position, consider trimming or hedging near-term earnings risk given a PEG of 4.47 versus the industry 2.64 and the stock's recent relative underperformance
• Target opportunistic accumulation only on a clear post-earnings pullback that narrows valuation toward industry averages and monitor analyst estimate revisions and FY guidance as primary catalysts