Key Takeaways
- Zscaler’s Q3 fiscal 2026 earnings release is scheduled for Tuesday, May 26, after market hours
- Consensus estimates call for $1.01 earnings per share (20% annual increase) and $835.60M revenue (23% growth)
- Implied volatility suggests approximately 13% post-announcement movement based on options activity
- Year-to-date performance shows ZS declining 19% while cybersecurity peers gained 8%
- Wall Street maintains Strong Buy rating with $224.78 mean price target across 34 analysts
Zscaler (ZS) is set to unveil its fiscal third-quarter 2026 results following Tuesday’s closing bell on May 26, with market participants monitoring developments after challenging stock performance.
Shares have declined 19% since January, significantly lagging the approximately 8% advance seen across the cybersecurity industry during the identical timeframe.
Derivatives markets are anticipating a price swing of about 13% following the earnings announcement. This projection exceeds ZS’s 8.25% average quarterly earnings reaction over the previous four reporting periods, suggesting heightened market uncertainty.
Analyst consensus points to earnings of $1.01 per share, representing a 20% year-over-year improvement. Revenue projections stand at $835.60 million, marking a 23% annual increase.
Zscaler has successfully surpassed both earnings and sales expectations in each of the past eight consecutive quarters, providing investors with a positive historical track record entering this report.
Strategic Symmetry Systems Acquisition Adds Momentum
Zscaler revealed its intention to purchase Symmetry Systems last week, a specialist in identity infrastructure and AI-driven data protection. The transaction awaits completion in the near term, with undisclosed financial arrangements.
Meta Marshall from Morgan Stanley maintained her Equalweight stance with a $155 target following the announcement. She highlighted how this acquisition strengthens Zscaler’s capabilities in AI Security and Data Security, segments experiencing accelerated expansion.
Marshall noted Zscaler’s ambitious goal of exceeding $500 million in AI Security annual recurring revenue by fiscal year-end 2026, while non-seat-based offerings now represent over 25% of new annual contract value. However, she emphasized investor desire for stronger evidence that these emerging revenue streams can compensate for decelerating growth in the traditional SASE platform.
Wall Street Sentiment Ahead of Results
UBS analyst Roger Boyd maintained his Buy recommendation with a $260 valuation target. He observed improved investor sentiment surrounding ZS recently, with April channel feedback showing improvement compared to earlier quarterly periods.
Boyd expressed increasing conviction in Zscaler’s second-half acceleration potential, highlighting sustained remaining performance obligations growth exceeding 30% across the last four quarters.
Jonathan Ruykhaver at Cantor Fitzgerald preserved his Overweight rating alongside a $300 price objective. His channel research revealed positive trends, with merely 5% of partner relationships reporting below-expectation performance.
Ruykhaver maintains optimism regarding extended-term expansion opportunities from SASE and Zero Trust technology adoption, identifying the ZFlex pricing structure as a competitive advantage — especially as non-seat-based pricing now contributes more than one-quarter of new ACV.
The Street’s aggregate view reflects a Strong Buy consensus derived from 28 Buy recommendations and six Hold ratings issued within the last 90 days. The mean analyst price target of $224.78 suggests approximately 23% appreciation potential from present trading levels.
Zscaler’s GuruFocus Score registers at 67 out of 100, featuring an impressive Growth Rank of 9/10 but comparatively weaker Financial Strength (5/10) and Profitability (3/10) metrics.
Corporate insiders have divested $2.4 million in shares during the recent three-month window, with zero insider buying activity documented over the same interval.
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