Zscaler, Inc. operates as a cloud security company worldwide. The company offers cyberthreat protection products, including Zscaler Internet Access, which provides threat protection, cloud sandbox, and cloud browser isolation; Zscaler Private Access solution that includes cyberthreat and data protection, application discovery, secure application access, application segmentation, application protection, reduced attack surface, and browser isolation; Zero Trust Firewall; Cloud Sandbox; and Zero Trust Browser. It also provides data security products, such as web and email DLP, endpoint DLP, BYOD security, multi-mode CASB, unified SaaS security, DSPM, AI-SPM, public gen AI security, and Microsoft Copilot data protection; Zero Trust Cloud solution. In addition, the company offers Zero Trust Branch comprising Zero Trust SD-WAN; IoT/OT segmentation; privileged remote access; Zscaler Cellular; and Zscaler Digital Experience that measures end-to-end user experience across business applications, as well as provides an easy-to-understand digital experience score for each user, application, and location within an enterprise. Further, it provides security operations products, including data fabric for security; asset exposure management; Risk360; unified vulnerability management; deception; managed detection and response; and managed threat hunting. Additionally, the company offers Zero Trust Gateway, a fully managed Zscaler service. It serves the automotive, airlines and transportation, conglomerates, consumer goods and retail, energy, financial services, healthcare, insurance, manufacturing, media and communications, public sector and education, technology, and telecommunications services industries. The company was formerly known as SafeChannel, Inc., and changed its name to Zscaler, Inc. in August 2008. Zscaler, Inc. was incorporated in 2007 and is headquartered in San Jose, California.
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Cloudflare's Workers Platform Drives Growth with 7.4 Million Developers
Cloudflare's Workers developer platform is becoming a key growth engine, with the company reporting over 7.4 million developers on the platform by the end of the second quarter of 2026, adding nearly two million in that quarter alone—more than the 1.5 million added during all of 2025. The platform is gaining traction among enterprise customers, with more including Workers in pool-of-funds contracts; for instance, an APAC technology company signed a $4 million Workers contract after an $8.7 million Application Services deal, and another signed a $6 million contract for AI agent capabilities. Cloudflare says Workers has moved beyond adoption to meaningfully contribute to revenues, driving consumption alongside security and networking products. The rise of AI agents could further boost the platform, with Zacks Consensus Estimates projecting 32.3% and 28.5% year-over-year revenue growth for 2026 and 2027, respectively. However, Cloudflare faces tough competition from Palo Alto Networks, whose SASE segment grew 40% year over year in fiscal Q3 2026, and Zscaler, which ended its fiscal Q3 with over 700 Zero Trust Everywhere enterprises, up from 550. Cloudflare's stock is up 40.7% year-to-date, trading at a forward price-to-sales ratio of 28.87 versus the industry's 3.91, and carries a Zacks Rank #3 (Hold).
Palo Alto Networks Network Security Growth Accelerates on AI Demand
Palo Alto Networks reported its Network Security business had its strongest quarter in several years during the third quarter of fiscal 2026, driven by rising enterprise spending on AI and cloud infrastructure. Next-generation firewall bookings grew nearly 40% year over year, supported by Gen 5 appliances and AI data center buildouts, while software firewall ARR increased 25% year over year. Network Security accounts for about 70% of total revenues, and hardware revenues, about 10% of total, had their best quarter in a decade with a record backlog. Management expects data center expansion and higher traffic volumes to remain key growth drivers for the next several quarters and potentially several years. Competitors CrowdStrike and Zscaler are also benefiting from AI-related cybersecurity demand, with CrowdStrike's AIDR solution seeing ending ARR grow more than 250% sequentially and Zscaler surpassing 700 Zero Trust Everywhere enterprises.
Zscaler and Carahsoft Expand Partnership to Deliver Zero Trust Security to SMB and Mid-Market Customers
Zscaler and Carahsoft Technology announced an expanded partnership to bring the Zscaler Zero Trust Exchange platform to U.S. small and medium-sized businesses and mid-market organizations. The initiative introduces standardized SMB-ready customer offers, simplified consumption with predictable pricing, partner enablement at scale, and go-to-market partner velocity. Zscaler's SVP of Global Partner Ecosystem Anthony Torsiello said the move makes the platform more accessible to a large underserved segment, while Carahsoft President Craig P. Abod highlighted easier procurement, deployment, and management through Carahsoft's reseller ecosystem.
Zscaler Raises CapEx Outlook as AI Security Demand Grows
Zscaler is preparing for higher capital expenditures as rapid adoption of artificial intelligence creates new cybersecurity demands, with management indicating fiscal 2026 CapEx could reach the high-single-digit percentage range of revenues, up from an earlier mid-single-digit forecast, and could increase by another 200 basis points as a percentage of revenues in fiscal 2027. The company has been moving some fiscal 2027 equipment purchases into the fourth quarter of fiscal 2026 to secure current prices amid higher costs for memory, storage and processors. Third-quarter fiscal 2026 revenues increased 25% year over year to $850.4 million, annual recurring revenues rose 25% to $3.53 billion, and its AI Protect solution generated more than $100 million in bookings over the past 12 months. Zscaler generated free cash flow of $136 million in the third quarter and $718.4 million in the first nine months of fiscal 2026, but management lowered its fiscal 2026 free cash flow margin guidance range to 22.8%-23.3% from the earlier forecast of 26.5%-27%. The Zacks Consensus Estimate for fiscal 2026 and 2027 indicates year-over-year revenue growth of 24.6% and 16.9%, respectively, while ZS shares have plunged 16.7% year to date and trade at a forward price-to-sales ratio of 7.77, significantly below the industry's average of 18.85.
Zscaler Named a Leader in Both 2026 Gartner Magic Quadrant for SASE Platforms and SSE
Zscaler has been recognized as a Leader in both the 2026 Gartner Magic Quadrant for SASE Platforms and the 2026 Gartner Magic Quadrant for Security Service Edge. This marks the fifth consecutive year Zscaler has been named a Leader in the SSE Magic Quadrant and its first year as a Leader in the SASE Platforms Magic Quadrant. The company believes these results underscore its accelerating market momentum and the proven capability of its Zero Trust SASE framework. Zscaler protects 40% of the Forbes Global 2000 and is introducing the ZAgent Framework to bring agentic AI to SASE management.
Zscaler, Shopify, and PTC Shares Jump as Falling Yields Boost Enterprise Software
Shares of Zscaler, Shopify, and PTC rose sharply in afternoon trading as a drop in Treasury yields and concerns over the artificial intelligence investment cycle improved market appetite for enterprise software. Zscaler gained 3.3%, Shopify added 2.8%, and PTC climbed 2.5%, benefiting from a broader rotation out of semiconductor stocks and into software names. The decline in interest rates provided a macro tailwind for long-duration Software-as-a-Service valuations, while portfolio managers reallocated capital away from chipmakers after the top 25 semiconductor and hardware companies reached a combined market capitalization of approximately $22 trillion. Zscaler remains down 31.4% year-to-date and trades 55% below its 52-week high of $336.27 from November 2025.
Zscaler and Schwarz Digits partner for sovereign cloud security platform in Europe
Zscaler has partnered with Schwarz Digits to launch a sovereign cloud-based cybersecurity platform for customers across Europe. The joint offering combines Zscaler's Zero Trust Exchange platform with Schwarz Digits' STACKIT cloud infrastructure hosted in Germany, delivering a sovereign Zero Trust Secure Access Service Edge platform designed to help organizations defend against AI-driven cyber threats while meeting Europe's digital sovereignty and regulatory requirements. Christian Müller, CEO of Schwarz Digits, said the partnership takes network security to a new level by evolving existing security architectures and focusing on high-performance identity verification, providing customers with stronger protection against cyberattacks.
Jim Cramer Names Palo Alto Networks and CrowdStrike as Top Cybersecurity Stocks for the AI Era
Jim Cramer told his followers that there will always be another DeepSeek and named Palo Alto Networks and CrowdStrike as the cybersecurity plays for a world where every enterprise is scrambling to secure frontier AI models and compromised agents. Palo Alto Networks shares are up 92.18% year-to-date, CrowdStrike is up 73.87% year-to-date, and Fortinet leads the group with a 102.47% year-to-date gain. Cramer also highlighted Zscaler, which is down 34.9% year-to-date despite nine straight EPS beats and an analyst target of $192.58, and Cloudflare, which is up 38.2% year-to-date as it pivots to an agentic AI-first company. The five stocks are positioned to benefit from enterprise budget shifts toward AI security infrastructure.
Zscaler shares jump after cyber threat warning puts security stocks back in focus
Shares of Zscaler moved sharply higher after U.S. and international security agencies issued a joint warning about Russian state-sponsored cyber threats against critical infrastructure. The cloud security stock has returned 9.5% over the past month and 15.6% over three months, though it remains down 35.7% year to date and has posted a one-year total shareholder return decline of 51.3%. A widely followed narrative on Simply Wall St pegs Zscaler's fair value at $192.58, implying the stock is 26.4% undervalued relative to its last close of $141.82, while its price-to-sales ratio of 7.2x sits above the U.S. software industry average of 3.5x but below peer levels around 10x and a fair ratio of 8.1x.
StockStory highlights three growth stocks with significant upside potential. Zscaler, with one-year revenue growth of 24.6%, benefits from steady annual recurring revenue trends and a robust free cash flow margin of 28.1%, trading at 6.3 times forward price-to-sales. DoorDash, posting 31% revenue growth, sees orders increasing 22.9% annually and expects 25.6% revenue growth, with shares at 21.5 times forward EV-to-EBITDA. Celsius, with 123% revenue growth, has a 50.4% gross margin and 215% annual earnings per share growth, trading at 18.3 times forward price-to-earnings.
Faruqi & Faruqi Investigates Zscaler Over Guidance and Sales Leadership Disclosures
Faruqi & Faruqi, LLP is investigating potential claims against Zscaler on behalf of investors who suffered significant losses. The investigation concerns whether Zscaler misled investors regarding its growth outlook, sales execution, customer expansion trends, and the impact of sales leadership changes before issuing weaker-than-expected guidance on May 27, 2026. On that day, Zscaler's stock fell $58.19, or 31.52%, to close at $126.41 per share, marking its steepest single-day decline since going public. Investors who purchased Zscaler stock or options and suffered losses, particularly following the May 27 decline, may have legal rights and are encouraged to contact Faruqi & Faruqi partner Josh Wilson directly.
Zscaler Lands Multi-Year Cybersecurity Deal With Aston Martin Aramco F1 Team
Zscaler has entered a multi-year global cybersecurity partnership with the Aston Martin Aramco Formula One Team. The agreement focuses on securing high-volume, real-time data flows that support car performance, race strategy, and broader team operations. The collaboration positions Zscaler's cloud security platform at the core of a high-profile, data-intensive sports environment. The deal puts Zscaler's Zero Trust Exchange in a highly demanding, real-time environment where data security and low latency are business critical, serving as a proof point for handling complex workloads. Visible branding on the AMR26 car and team assets could support Zscaler's positioning with enterprise buyers.
Zscaler's Average Brokerage Recommendation Is 1.44, but Zacks Rank Says Hold
Zscaler currently has an average brokerage recommendation of 1.44, based on 45 analyst ratings, with 34 Strong Buys and two Buys. However, the Zacks Rank assigns the stock a Hold rating, citing an unchanged consensus earnings estimate of $4.13 for the current year. Brokerage recommendations often carry a positive bias due to firms' vested interests, while the Zacks Rank focuses on earnings estimate revisions, which research shows correlate with near-term price movements. Investors are advised to be cautious about relying solely on the buy-equivalent ABR.
Cybersecurity stocks reported satisfactory first-quarter results, with aggregate revenues beating analyst consensus estimates by 1.6% and next-quarter revenue guidance in line. Okta posted revenue of $765 million, up 11.2% year-over-year and exceeding expectations by 1.7%, while Palo Alto Networks delivered the fastest revenue growth among peers at 31.1% to $3.00 billion, beating estimates by 2%. SentinelOne was the weakest performer, with revenue of $276.7 million, up 20.8% year-over-year but in line with estimates, and its billings and guidance missed expectations. Zscaler reported revenue of $850.5 million, up 25.4% year-over-year and topping estimates by 1.8%, and Varonis Systems posted revenue of $173.1 million, up 26.9% year-over-year and beating estimates by 4.6%, the biggest beat among the group. Since reporting, cybersecurity stocks have averaged a 16.7% share price increase.
KeyBanc Lowers its Price Target on Zscaler to $176
KeyBanc lowered its price target on Zscaler to $176 from $190 while maintaining an Overweight rating. The firm's chief investment officer survey for the first half of 2026 indicated a widening gap between IT budget winners and losers, with AI and AI-readiness spending rising sharply in priority. KeyBanc recommended investors stick with security, data, infrastructure, and monitoring names. Earlier in June, Guggenheim upgraded Zscaler to Buy from Neutral with a $214 price target, calling it a category leader in a nascent hyper-growth market. Last month, Wells Fargo lowered its price target on Zscaler to $180 from $210 and kept an Overweight rating, noting that resetting next year's top-line numbers was needed but that free cash flow headwinds could keep investors sidelined.
Zscaler Q3 Earnings Beat Estimates, Revenue Up 25%
Zscaler reported third-quarter fiscal 2026 non-GAAP earnings of $1.08 per share, beating the Zacks Consensus Estimate of $1.00 by 8%. Revenues rose 25% year over year to $850.4 million, topping the consensus of $834 million and management's guidance range of $834 million to $836 million. Remaining performance obligations reached $6.5 billion, up 30% year over year, with 46% classified as current. The company ended the quarter with 748 customers generating more than $1 million in annual recurring revenue, an 18% increase. For the fourth quarter, Zscaler expects revenues between $875 million and $878 million and non-GAAP earnings per share of $1.08 to $1.09.
Pomerantz Law Firm Investigates Zscaler Over Possible Securities Fraud
Pomerantz LLP is investigating claims on behalf of investors of Zscaler, Inc. The investigation concerns whether Zscaler and certain of its officers or directors engaged in securities fraud or other unlawful business practices. On May 26, 2026, Zscaler reported third-quarter fiscal 2026 financial results that beat revenue and earnings expectations but guided for current-quarter revenue between $875 million and $878 million, missing the $879 million consensus. Following the news, Zscaler's stock fell $58.19 per share, or 31.52%, to close at $126.41 per share on May 27, 2026.
Zscaler Stock Drops 32% in a Month Despite Strong Earnings Estimate Revisions
Zscaler shares have fallen 32% over the past month, underperforming the broader market and its industry. The cloud security provider is expected to report earnings of $1.08 per share for the current quarter, a 21.4% increase from a year ago, with the consensus estimate rising 531.3% over the last 30 days. For the current fiscal year, the consensus earnings estimate is $4.13, up 25.9% year-over-year and revised 436.5% higher over the past month. Revenue is projected to reach $877.19 million for the current quarter, a 22% increase, while full-year sales estimates stand at $3.33 billion and $3.9 billion for the current and next fiscal years, respectively. Despite these upward revisions, Zscaler carries a Zacks Rank #3 (Hold) and a Value Style Score of F, indicating it trades at a premium to peers.
Zscaler Holds Edge Over CrowdStrike on Steadier Growth and Lower Valuation
Zscaler currently offers a more compelling investment case than CrowdStrike, according to a Zacks Investment Research analysis. While both cybersecurity leaders benefit from rising cyber threats, CrowdStrike's revenue growth has decelerated from over 35% in fiscal 2024 to an expected 23-24% in fiscal 2027, with its stock trading at a forward sales multiple of 27.08 times. In contrast, Zscaler is seeing strong adoption of its Zero Trust Everywhere strategy, which helped it sign the largest branch deal in its history during the third quarter of fiscal 2026, and its shares trade at a much lower forward sales multiple of 5.26 times. Zscaler carries a Zacks Rank of 3, or Hold, while CrowdStrike is rated a 4, or Sell.
Jim Cramer Says SaaS Companies Like Zscaler Have Fallen Viciously Out of Favor on Wall Street
Jim Cramer commented on Zscaler's removal from the Nasdaq-100 during his Mad Money show, stating that software-as-a-service companies like Zscaler have fallen viciously out of favor on Wall Street. The Nasdaq-100 rebalancing will see Zscaler replaced alongside Verisk, Cognizant, Insmed, and Charter Communications, while Rocket Lab, Astera Labs, Teradyne, Nebius, and CoreWeave are added. Cramer noted that almost every SaaS company was down on the day, including Adobe. Zscaler provides cloud-based security through its zero-trust platform and threat-defense tools.
Palo Alto Networks SASE ARR Hits $1.6 Billion, Up 40% Year Over Year
Palo Alto Networks reported that its Secure Access Service Edge annual recurring revenues reached $1.6 billion in the third quarter of fiscal 2026, a 40% increase year over year and more than twice the overall SASE market growth rate. The company recorded nearly 50 displacement wins worth $200 million in contract value year to date, as enterprises replace competing products with its platform. Secure Browser adoption surged to 11 million licenses, up four times from the prior year. The Zacks Consensus Estimate for fiscal 2026 revenues indicates a year-over-year increase of around 23.7%. Rivals Zscaler and Fortinet are also expanding in the SASE space, with Fortinet's Unified SASE ARR growing 12% year over year in the first quarter of 2026.