This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
Zscaler beat on both lines last quarter and the stock still declined, as the market priced the growth and free cash flow outlook. Shares have seen limited recovery since, so tonight's earnings report hinges on ARR momentum and fiscal 2027 guidance.
Reported Tue, May 26 · next print Thu, Sep 3
The full-chain put/call ratio on Zscaler (NASDAQ:ZS) sits at 0.64, a call-heavy skew that fits with today’s 3.91% pre-earnings rally to $179.48. Front-week contracts expiring September 4 show a ratio of 0.66, suggesting traders are leaning long into the event.
The October 23 expiration prints a ratio of 8.31, and February 2027 spikes to 28.15, pointing to sizable protective put positioning or hedged institutional bets.
History urges caution: the last three reports produced day-of drops of -31.52%, -12.17%, and -13.03% despite beats. One-week reactions were kinder, with Q2 FY26 rebounding 11.61% and Q3 FY26 recovering 6.3%.
Bottom line: options lean bullish, but overnight gap risk is real.
Zscaler reports Q4 earnings after the bell tonight, with investors focused on ARR growth and management’s outlook for fiscal 2027.
The stock has fallen roughly 37% over the past year, and concerns have shifted from demand toward the company’s growth outlook and free cash flow. Higher capital expenditures have pressured expected free cash flow margins.
Investors will also be watching momentum across AI Protect, ZFlex, and Zero Trust Branch. Strong adoption could reinforce Zscaler’s broader platform story and show that rising AI security demand is translating into recurring revenue.
A clean beat and encouraging fiscal 2027 outlook could help restart a re-rating in the shares. Anything softer could extend the multiple compression that has weighed on Zscaler over the past year.
This article is updated throughout the trading day. Check back for more.
Zscaler (NASDAQ:ZS | ZS Price Prediction) is expected to report Q4 FY2026 results after the bell at 4:05 PM ET. Shares are down about 23.2% year to date, and the setup pairs a raised full-year guide with a cautious fiscal 2027 framing that has reset investor expectations.
Last quarter, revenue rose 25.4% to $850.48 million, ahead of the $835.66 million consensus, while non-GAAP EPS of $1.08 topped estimates by 7.11%. ARR reached $3.525 billion on $166M net new, and non-GAAP operating margin hit an all-time high of 23%.
Even so, shares fell 31.52% on the day as management cut FY2026 free cash flow margin guidance to 22.8% to 23.3% from 26.5% to 27% on higher capex, and an early FY2027 outlook called for 16% to 17% ARR and revenue growth. Sentiment has since improved, with the stock up 11.83% over the past month.
| Metric | Q4 FY2026 Est | YoY Change | FY2026 Est | FY2027 Est |
|---|---|---|---|---|
| Revenue | $877.6M | +22% | $3.33B | $3.90B |
| EPS (Normalized) | $1.09 | +22% | $4.1332 | $4.5978 |
Revisions skew positive at the fiscal year level, with 44 upward FY2026 EPS revisions in the last 30 days versus 1 downward. FY2027 is more contested at 26 up and 19 down, reflecting the debate over margin recovery and Red Canary contribution.
Wall Street is looking for CEO Jay Chaudhry’s team to show that the raised full-year targets convert into a Q4 beat. I’ll be watching ARR against the $3.740-$3.749 billion FY guide, focusing on the organic net new ARR excluding Red Canary, which management called approximately 9.5% growth.
Free cash flow deserves equal attention. Zscaler is accelerating data-center equipment purchases into Q4 to lock in current prices amid memory, storage, and processor constraints. Analysts will likely focus on whether operating cash flow scales enough to cover the increase in capex.
Product momentum matters too. Zero Trust Everywhere ended Q3 with more than 700 enterprises versus over 550 in Q2, AI Protect bookings crossed $100 million over 12 months, and ZFlex delivered just over $480 million in TCV during Q3.
Finally, I’ll be watching how CEO Chaudhry frames the two sales leader departures that seeded conservative FY2027 guidance, and any insights on new-logo coverage in the 2,000 to 10,000 user mid-market segment.
| Quarter | EPS Surprise | Day-of Move | 1-Week Move | 30-Day Move |
|---|---|---|---|---|
| Q3 FY2026 | +7.11% | -31.52% | +6.3% | +8.85% |
| Q2 FY2026 | +12.56% | -12.17% | +11.61% | -4.56% |
| Q1 FY2026 | +11.42% | -13.03% | -4.02% | -9.74% |
| Q4 FY2025 | +11.03% | -1.45% | +3.03% | +12.87% |
On average, shares moved +2.31% seven days after earnings across the past 10 reported beats.
Contact [email protected] for any questions or corrections.
Thomas Richmond is a financial writer and content strategist with 5+ years of experience covering stocks and financial markets. He has published over 250 articles focused on individual stock analysis, helping investors better understand business fundamentals, stock valuations, and long-term opportunities.
Thomas previously served as a Content Lead at TIKR, a stock research platform, where he helped scale the company’s blog to hundreds of articles per month and contributed to a weekly newsletter reaching more than 100,000 investors.
He specializes in breaking down complex companies into clear, actionable insights for everyday investors, with a focus on fundamentals-driven research.
His work has also been featured on platforms including Seeking Alpha and Sure Dividend.
Outside of work, Thomas enjoys weight lifting and soccer.
Investors are watching Zscaler (NASDAQ:ZS | ZS Price Prediction) ahead of fiscal Q3 2026 results due tonight, Tuesday, May 26, 2026, at 4:05 PM ET. After a brutal six months and a sharp May…
HPE has surged 120% this year on AI backlog growth and Juniper synergies, but Wall Street now sits above management's own guidance ceiling, leaving tonight's Q3 report as the moment that either validates the…
Credo Technology carries 8 straight EPS beats into tonight's report, but a stock priced at 40 times forward earnings and a 3.2 beta leaves almost no room for anything short of a blowout. Watch…
Investors are watching Constellation Brands (NYSE:STZ | STZ Price Prediction) ahead of its Q1 FY2027 results, expected at 4:05 PM ET tonight. After a bruising stretch for the stock, this report will test whether…
Okta (Nasdaq: OKTA | OKTA Price Prediction) reports its fourth-quarter fiscal year 2026 results after the market closes tonight, March 4, 2026. Wall Street’s expectations are closely aligned with management’s own guidance, with consensus…
Seagate shares have surged nearly 450% over the past year, but a sudden drop today ahead of tonight's fiscal Q4 report raises the question of whether HAMR execution and cloud demand can hold up…
Marvell enters tonight's Q2 report riding a nearly 190% year-to-date surge, but with Polymarket traders pricing in a 94% chance of an EPS beat, the real question is whether any result can actually surprise…
Deckers enters tonight's Q1 print riding four straight double beats and a $5 billion buyback, yet shares have already sold off sharply with options traders bracing for turbulence. Whether HOKA's growth story holds up…
Jack Henry reports Q4 FY2026 after the bell tonight, and four specific signals in the release will reveal whether the fintech's May guidance raise was a promise or a stretch.
