Zscaler Inc. (NASDAQ:ZS) on Tuesday reported upbeat financial results for the third quarter, but issued fourth-quarter sales guidance with its midpoint below estimates.

Zscaler posted third-quarter revenue of $850.48 million, beating the consensus estimate of $835.38 million. The cybersecurity company reported third-quarter adjusted earnings of $1.08 per share, beating analyst estimates of $1.01 per share, according to Benzinga Pro.

"Zscaler is ideally positioned as the cybersecurity platform for the AI era. Our differentiated Zero Trust SASE architecture, which hides applications from attackers and eliminates lateral movement, has never been more essential in securing against threats exposed by frontier models and compromised AI agents," said Jay Chaudhry, chairman and CEO of Zscaler.

Zscaler expects fourth-quarter revenue to be in the range of $875 million to $878 million, versus estimates of $878.53 million. The company anticipates fourth-quarter adjusted earnings of $1.08 to $1.09 per share, versus estimates of $1.03 per share. The company's soft fourth-quarter revenue guidance appears to be weighing on shares after hours.

Zscaler also raised its fiscal 2026 revenue outlook from a range of $3.31 billion to $3.32 billion to a new range of $3.330 billion to $3.333 billion, versus estimates of $3.32 billion. The company raised its full-year adjusted earnings guidance from a range of $3.99 to $4.02 per share to a new range of $4.10 to $4.11 per share, versus estimates of $4.01 per share.

Zscaler shares dipped 24.8% to $138.98 in pre-market trading..

These analysts made changes to their price targets on Zscaler following earnings announcement.

  • Evercore ISI Group analyst Peter Levine downgraded the stock from Outperform to In-Line and lowered the price target from $225 to $155.
  • Bernstein analyst Peter Weed maintained the stock with an Outperform rating and cut the price target from $228 to $224.

Considering buying ZS stock? Here’s what analysts think:

Photo via Shutterstock