Why Analysts Are Still Bullish on Zscaler (ZS) Stock Into Earnings Tuesday

TLDR

• Zscaler reports Q3 FY26 earnings after market close on Tuesday, May 26
• Wall Street expects EPS of $1.01 (up 20% YoY) and revenue of $835.60 million (up 23% YoY)
• Options traders are pricing in a ~13% move in either direction post-earnings
• ZS stock is down 19% year-to-date, underperforming the cybersecurity sector’s 8% gain
• Analysts hold a Strong Buy consensus with an average price target of $224.78

Zscaler (ZS) reports Q3 FY26 earnings after the bell on Tuesday, May 26, with Wall Street watching closely after a rough year for the stock.

Zscaler, Inc., ZS

ZS is trading down 19% year-to-date, a stark contrast to the broader cybersecurity sector which is up around 8% over the same period.

Options traders are pricing in a move of roughly 13% in either direction following the print. That’s well above ZS’s average post-earnings move of 8.25% over the past four quarters, signaling elevated uncertainty heading in.

Wall Street expects earnings per share of $1.01, which would be a 20% increase year-over-year. Revenue is forecast at $835.60 million, up 23% from the same quarter last year.

Zscaler has beaten both EPS and revenue estimates in every quarter over the past two years, which gives some investors reason to feel optimistic going in.

Symmetry Systems Acquisition in Focus

Last week, Zscaler announced plans to acquire Symmetry Systems, a cybersecurity firm focused on identity mapping and AI data security. The deal is expected to close shortly, and financial terms were not disclosed.

Morgan Stanley analyst Meta Marshall kept her Equalweight rating and $155 price target following the news. She said the acquisition supports Zscaler’s push into AI Security and Data Security, two faster-growing areas of the business.

Marshall pointed out that Zscaler is targeting AI Security ARR above $500 million by end of FY26, with non-seat-based products now making up more than 25% of new ACV. She added, though, that investors still want to see clearer evidence that these newer lines can scale fast enough to offset slower growth in the core SASE business.

Analyst Ratings Going Into the Print

UBS analyst Roger Boyd reiterated a Buy rating with a $260 price target. He noted that sentiment around ZS has improved in recent months, and that channel checks from April were more encouraging than earlier in the year.

Boyd also said UBS is growing more confident in Zscaler’s second-half growth trajectory, citing more than 30% RPO growth over the past four quarters.

Cantor Fitzgerald analyst Jonathan Ruykhaver kept his Overweight rating and $300 price target. Channel checks were solid, with only 5% of partners reporting results below plan.

He remains bullish on long-term growth from SASE and Zero Trust adoption, and sees the ZFlex pricing model as a key differentiator — particularly as more than 25% of new ACV now comes from non-seat-based pricing.

Across Wall Street, ZS carries a Strong Buy consensus based on 28 Buy ratings and six Hold ratings over the past three months. The average price target sits at $224.78, implying roughly 23% upside from current levels.

Zscaler’s GF Score stands at 67/100, with a Growth Rank of 9/10 but lower marks for Financial Strength (5/10) and Profitability (3/10).

Insiders sold $2.4 million worth of stock in the past three months, with no recorded purchases during that period.

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