Zscaler (ZS) Stock: What Analysts Expects from Earnings Tuesday

TLDR

• Zscaler reports Q3 FY26 earnings on Tuesday, May 26
• Wall Street expects revenue of $835.60 million, up 23% year-over-year, and EPS of $1.01, up 20% YoY
• Options traders are pricing in a ~13% move in either direction post-earnings
• ZS stock is down 19% year-to-date, trading at $181.92, vs. an average analyst price target of $224.78
• Zscaler recently announced plans to acquire Symmetry Systems to bolster its AI data security capabilities

Zscaler (ZS) is heading into Tuesday’s Q3 FY26 earnings report with the stock down 19% year-to-date, trading around $181.92. The average analyst price target sits at $224.78, implying roughly 23% upside from current levels.

Zscaler, Inc., ZS

Wall Street is expecting revenue of $835.60 million for the quarter, a 23% increase from the same period last year. EPS is forecast at $1.01, which would represent a 20% year-over-year gain.

Options traders are bracing for a big move. According to TipRanks’ Options Tool, the implied move around earnings is about 13% in either direction — well above Zscaler’s average post-earnings move of 8.25% over the past four quarters.

Last quarter, the company reported revenue of $815.8 million, up 25.9% year-over-year, beating analyst estimates and guiding above expectations for both quarterly and full-year EPS.

The broader cybersecurity sector has had a decent run lately, with the peer group up around 10% on average over the past month. Zscaler has outpaced that, climbing 35.6% over the same stretch.

Varonis Systems recently posted 26.9% year-over-year revenue growth, beating estimates by 4.6%, and its stock jumped 7.3% on the results. Tenable grew revenues 9.6%, beat by 1.2%, but still dropped 2.7% post-earnings.

What Analysts Are Watching

Investors will be focused on large enterprise deal activity, growth in the core zero-trust platform, and whether Zscaler’s newer AI security products are translating into meaningful ARR gains.

Management has flagged that AI Security ARR is expected to exceed $500 million by the end of FY26. Non-seat-based products now account for more than 25% of new ACV — a figure analysts are watching closely as a sign the business model is diversifying.

UBS analyst Roger Boyd reiterated a Buy rating with a $260 price target heading into the print. He noted that channel checks in April were more encouraging and that the firm is growing more confident in Zscaler’s second-half outlook, supported by more than 30% RPO growth over the past four quarters.

Cantor Fitzgerald’s Jonathan Ruykhaver also reiterated an Overweight rating, keeping his $300 price target in place. He said recent channel checks were solid, with only 5% of partners reporting below-plan results.

Symmetry Systems Acquisition

Just ahead of earnings, Zscaler announced plans to acquire Symmetry Systems, a company focused on identity mapping and AI data security. The deal is expected to close shortly, though financial terms were not disclosed.

Morgan Stanley’s Meta Marshall kept an Equalweight rating and a $155 price target after the news. She acknowledged the deal supports Zscaler’s push into AI and data security but said investors still want to see clearer evidence that newer business lines can scale quickly enough to offset slowing growth in the core SASE segment.

Wall Street’s overall stance on ZS remains bullish. The stock carries a Strong Buy consensus rating based on 28 Buy ratings and six Holds over the past three months.

Zscaler reports after market close on Tuesday, May 26.

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