Zscaler (NASDAQ: ZS) reported strong fiscal fourth-quarter 2026 results with revenues of $898.19 million, a year-over-year growth of 24.9%, surpassing analysts’ expectations by over 230 basis points. Key growth drivers included new client acquisition and increased demand for AI solutions, which saw a 50% sequential surge. Despite these gains, the company faces challenges with a leadership transition impacting sales execution.
GAAP and non-GAAP margins also improved, with the non-GAAP operating margin rising 220 basis points to 24.3%. Adjusted earnings per share (EPS) increased by 34%, exceeding expectations by 10 cents. Analysts raised price targets following the report, highlighting a consensus that shares could potentially reach as high as $390 amid a bullish outlook, although ongoing concerns about sales management remain.
Institutional ownership stands at about 46%, suggesting stable support, while Zscaler’s balance sheet reflects a 44% increase in shareholder equity despite a year-over-year decline in cash due to capital expenditures. Analysts generally remain optimistic, indicating that Zscaler could exceed its guidance due to strong demand for its cybersecurity solutions.
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