Zscaler Slashes FCF Margin Outlook; Stifel Warns of 'Messy' Q3, Sales Departures
ZS is trading near its 52-week low of $114.625 (10% above the low) on elevated volume (8.6× avg).
Summary
Zscaler significantly cut its full-year free cash flow (FCF) margin guidance from 26.5-27% to 22.8-23.3%, citing higher infrastructure costs. This follows the company's recent strong Q3 earnings report, which also noted a widened GAAP net loss due to strategic investments. Stifel analysts characterized Q3 as 'messy,' highlighting concerns over slower FY27 revenue, two senior sales executive departures, increased capital expenditures, and delayed AI benefits. Mizuho also reduced its price target by $25 to $185. The revised FCF outlook and analyst concerns about future growth and internal changes present a more cautious picture for the company.
At the time of this announcement, ZS was trading at $126.41 on NASDAQ in the Technology sector, with a market capitalization of approximately $20.4B. The 52-week trading range was $114.63 to $336.99. This news item was assessed with negative market sentiment and an importance score of 8 out of 10. Source: Wiseek News.