Zscaler shares plunge 30% on weak billings guidance, dragging peers down

Zscaler shares plunged more than 30% on Wednesday after the cybersecurity firm issued softer guidance and blamed sales leadership changes for a weaker outlook, dragging other cybersecurity stocks lower. Zscaler traded near $126.66 at press time, down about 31% on the day.

The company reported fiscal third quarter adjusted earnings of $1.08 per share on revenue of $850.5 million, beating analyst expectations. But investors focused on Zscaler’s fiscal fourth quarter revenue forecast of $875 million to $878 million, which came in slightly below consensus estimates.

Zscaler also pointed to the departure of two sales leaders at the end of the quarter as a factor behind the outlook. One role has been filled, while the other remains open, adding concern that execution issues could weigh on growth into fiscal 2027.

The guidance miss hit the broader cybersecurity trade. Palo Alto Networks and CrowdStrike fell around 3% as investors reassessed software growth expectations, although Wedbush and Stifel analysts said Zscaler’s problems looked more company specific than sector wide.

Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.