**Zscaler, Inc. (ZS) Reports Decline Amidst Revised Growth Projections**
Zscaler, Inc. has seen a 32.4% decline in stock price since releasing third-quarter fiscal 2026 results on May 26, closing at $124.73 on June 10, only 8.8% above its 52-week low of $114.62. Preliminary guidance for fiscal 2027 suggests a significant deceleration in growth, projecting a 16% to 17% year-over-year increase in revenues and annual recurring revenues, down from mid-20s growth rates. The company’s sales leadership turnover and conservative customer acquisition assumptions contribute to this outlook.
Despite a year-to-date decline of 44.5%, Zscaler posted third-quarter revenues of $850 million, a 25% year-over-year increase, and its annual recurring revenue (ARR) reached $3.53 billion. Additionally, demand for Zscaler’s AI-focused offerings has surged, generating over $100 million in bookings over the past year. Currently, Zscaler’s forward price-to-sales ratio stands at 5.27, significantly below the industry average of 14.75, indicating a potentially attractive valuation compared to competitors like Fortinet and Palo Alto Networks, which have seen substantial stock increases in 2023.
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