Does Zscaler Stock's Run Make Any Sense? Trefis Team Mon, October 12, 2026 at 6:48 PM EDT 3 min read ZS ^GSPC PANW FTNT NET Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
Zscaler (ZS) stock has climbed 56% over the past three months, comfortably outpacing the 2.8% gain for the S&P 500. Over twelve months, however, the stock is still down 26%. During this recent three-month stretch, the cybersecurity company posted 25% sales growth for fiscal Q4 2026 but projected slower growth for the year ahead. Management then reiterated that conservative outlook at an Investor Day on October 6, 2026. This presents a striking contradiction: investors are bidding up shares even as executives anticipate a slowdown. What could buyers be seeing that Zscaler's forecast does not spell out?
Zscaler Added New Subscriptions Faster In Fiscal Q4 2026
Zscaler measures its new business through the yearly subscription revenue it adds each quarter. Excluding the recent Red Canary acquisition, that revenue grew 17% from a year earlier in fiscal Q4 2026. This represents a noticeable acceleration from the 10% growth recorded in the first half of the fiscal year, a detail management highlighted on a September 3, 2026 call.
Part of this momentum comes from the company's Security for AI products. Bookings for these offerings rose more than 50% from the prior quarter. Notably, Zscaler charges for almost all of these products based on usage.
Management added that its financial guidance does not specifically call out the contribution from Security for AI. Because buyers cannot see exactly how much of this contribution the forecast includes, they may expect these products to perform better than the official projections show.
What Are Buyers Of Zscaler Stock Paying For?
Investors are currently paying 11.3 times sales for Zscaler, compared with a multiple of 3.1 times for the S&P 500. Because the company lost money over the last twelve months, a price-to-earnings ratio is not meaningful, and sales are the measure used here.
Zscaler differs from the broader index in how fast those sales grow. Over the past three years, Zscaler saw its revenue expand by 27.6% a year on average. During the same period, the S&P 500 averaged just 5.9% growth.
Moving forward, executives anticipate a slower year. They guided for fiscal 2027 revenue growth of 16.6% to 17.5%, a step down from the 25% growth achieved in fiscal 2026. Buyers appear willing to pay a higher multiple for growth, but Zscaler's upcoming results for fiscal 2027 will ultimately reveal how much of that growth remains intact.
Zscaler Has Just Changed Its Sales Leadership
Zscaler appointed a new chief revenue officer on September 24, 2026. On the September 3 call, management discussed a separate change: two regional and industry sales leaders had left, and that transition was built into guidance. The chief revenue officer change came three weeks later. Management repeated its guidance on October 6, after the appointment. Additionally, management expects the Red Canary acquisition to add no net new subscription revenue in fiscal 2027, because Zscaler is building that technology directly into its new Agentic SecOps product.
The fiscal Q1 2027 earnings report will be the first quarter to reflect the new sales leadership. Management guided for revenue of $935 million to $939 million for that period, up from $898 million in fiscal Q4 2026. If revenue clears the top of that range, it would show Zscaler selling through the leadership change faster than management had planned for.
Does This Mean You Should Act On ZS?
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