Can Zscaler (ZS) Earnings Save Cybersecurity’s Slump This Week?

Zscaler (ZS) will report its quarterly results after today’s closing bell, capping off what has been an earnings season full of ups and downs for cybersecurity.

The Street’s expectations for the cloud-based security company are $1.09 in earnings-per-share against $0.89 in the year-ago quarter (+22.5%) and revenue at $877.14 million vs. $719.23 million last year (+21.9%).

Zscaler’s business involves an intelligent cloud-based switchboard known as the Zero Trust Exchange that eliminates traditional virtual private networks (VPNs). Using Zscaler software, corporate workers are connected only to the specific apps and websites they need, rather than the entire company network, to reduce opportunities for broader malicious access.

However, like many other software names, Zscaler’s stock was hit hard by the so-called “SaaSpocalypse” in early 2026. Fears of major disruption from artificial intelligence roiled markets and sent shares plunging roughly -66% from highs of 336.99 on Nov. 3 to the current 52-week low of 114.63 on April 10. Zscaler’s stock fell over 31% after reporting earnings on May 26 despite a beat on the top and bottom lines. Zscaler's fiscal 2026 guidance increase was less than expected, and the 2027 growth outlook of 16% to 17% year-over-year for annual recurring revenue, and revenue, disappointed investors.

Here are three things to consider for Zscaler’s earnings.

Technicals and Options Market: ZS shares faltered at a recent relative high around 191 which matches up with prior peaks from mid-August and May 26, when the stock sold off after Zscaler announced a cut to full-year free-cash flow guidance. Price has made only limited upside progress in recent weeks beyond the 251-day Exponential Moving Average, which is around 183 as of yesterday’s close. Meanwhile, the 63-day EMA, which now comes in around 162, was supportive on Aug. 26.

Examining the options market, the potential expected move range for tomorrow’s Sept. 4 weekly expiration, which includes the earnings event, comes in at +/-20.4 (11.5%), a possible catalyst for a breakout beyond the recent ceiling of around 191. Meanwhile, the Sept. 18 monthly expiration shows a range of +/-25.5 (14.4%). See the June 1 interview: Zscaler (ZS) CFO on Earnings, AI Opportunity in Cybersecurity & Symmetry Systems Acquisition

Recent Cybersecurity Earnings: It’s been a mixed bag for cybersecurity this earnings season. Names like CrowdStrike (CRWD) and Okta (OKTA) produced earnings that beat expectations and shares rallied. Yet the biggest name in the field, Palo Alto Networks (PANW), suffered a post-earnings 9.3% slide Wednesday despite strong results that sent the sector lower. The Amplify Cybersecurity ETF (HACK) fell 2.2% on Wednesday and is down 5.3% this week. The consistent theme among the various reports is strong demand for cybersecurity software and services due to the advent of artificial intelligence and the new risks that it poses are a major tailwind for the sector. See DELL, ORCL, ZS & This Week's Tech Earnings to Gauge Lasting AI Strength

Analyst Outlook: Recent analyst activity has been largely bullish, with at least eight firms raising their price target on Zscaler during August. JPMorgan on Aug. 26 raised its target to $215 from $205 while keeping its Overweight rating, saying they see accelerating security demand offering fundamental improvement for the group. Additionally, Barclays on Aug. 25 lifted its target to $192 from $170, maintaining an Overweight rating, and said Zscaler’s 16-17% fiscal 2027 annual recurring revenue growth outlook is likely to stay unchanged. However, Evercore ISI on Aug. 26 added Zscaler to its “Tactical Underperform” list, saying channel checks point to an in-line quarter with limited evidence of upside. See Charts to Watch: SPX, FIG, ZS

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