Key Takeaways
- Q3 FY26 financial results for Zscaler will be released after trading ends on Tuesday, May 26
- Consensus estimates call for $1.01 earnings per share (20% annual increase) and $835.60 million in revenue (23% annual growth)
- Post-earnings price movement of approximately 13% is implied by options market activity
- Year-to-date performance shows ZS down 19%, trailing the cybersecurity industry’s 8% advance
- Wall Street maintains Strong Buy rating with $224.78 average target price
Investors are preparing for Zscaler (ZS) to unveil its Q3 FY26 financial performance after Tuesday’s market close on May 26, following a challenging year for shares.
Shares have declined 19% since January, significantly underperforming the cybersecurity sector’s approximately 8% gain during the same timeframe.
The options market suggests potential volatility of around 13% following the earnings announcement. This exceeds ZS’s typical 8.25% post-earnings swing over the last four quarters, indicating heightened investor uncertainty.
Street consensus points to earnings per share reaching $1.01, representing 20% growth versus the prior-year period. Analysts anticipate revenue will hit $835.60 million, marking a 23% year-over-year improvement.
Zscaler has consistently surpassed both earnings and revenue projections throughout the past eight consecutive quarters, providing bulls with historical precedent for optimism.
Symmetry Systems Deal Adds Strategic Dimension
The company unveiled its intention to purchase Symmetry Systems last week, a security platform specializing in identity infrastructure and AI Security capabilities. While deal terms remain confidential, completion is anticipated soon.
Morgan Stanley’s Meta Marshall maintained her Equalweight stance with a $155 target following the announcement. She noted the transaction aligns with Zscaler’s strategic emphasis on AI Security and Data Security, both representing higher-growth market segments.
Marshall highlighted management’s goal of surpassing $500 million in AI Security annual recurring revenue by fiscal year-end 2026, with non-seat-based offerings now comprising over 25% of new annual contract value. However, she emphasized investors remain focused on whether these emerging revenue streams can accelerate sufficiently to counterbalance deceleration in the legacy SASE portfolio.
Wall Street’s View Heading Into Results
UBS‘s Roger Boyd maintained his Buy recommendation with a $260 valuation. He observed improving investor sentiment surrounding ZS recently, with April channel feedback showing notable improvement from earlier quarterly readings.
Boyd expressed increasing conviction in the company’s second-half growth outlook, referencing remaining performance obligations growth exceeding 30% across the trailing four quarters.
Cantor Fitzgerald’s Jonathan Ruykhaver retained his Overweight rating alongside a $300 target. His channel surveys proved encouraging, with merely 5% of distribution partners indicating performance beneath expectations.
He maintains conviction in sustained expansion from SASE adoption and Zero Trust architecture migration, viewing the ZFlex pricing framework as strategically advantageous — especially as non-seat-based pricing now accounts for more than a quarter of new business.
The consensus view from 34 analysts covering ZS reflects Strong Buy, comprising 28 Buy recommendations and six Hold ratings issued within the last 90 days. The mean price objective stands at $224.78, suggesting approximately 23% appreciation potential from present trading levels.
The company’s GF Score registers 67 out of 100, featuring an impressive Growth Rank of 9/10 but weaker scores in Financial Strength (5/10) and Profitability (3/10).
Corporate insiders have divested $2.4 million in stock over the previous three months, with zero insider buying activity recorded during that window.
