Zscaler (ZS) reported Tuesday fiscal fourth-quarter earnings, revenue and billings that exceeded Wall Street targets, amid major changes to its sales organization. But the cybersecurity company’s 2025 fiscal guidance for Zscaler stock disappointed investors, sending shares lower.
↑
X
Market suffers from expectations breaker; Nvidia, Freshpet, CyberArk in the picture
After the market closed, it was reported that Zscaler’s earnings rose 37% to 88 cents per share on an adjusted basis from a year earlier. Revenue rose 30% to $592.9 million, the San Jose, California-based company said.
Zscaler stock analysts expected earnings of 70 cents per share on revenue of $567.5 million.
Also, fourth-quarter billings rose 27% to $910.8 million, compared to estimates of $892.5 million.
Zscaler Stock: Disappointing guidance
For the current quarter, Zscaler expects revenue of $605 million at the midpoint of expectations, versus estimates of $603 million.
For fiscal 2025, which begins with the current quarter ending in October, Zscaler forecasts earnings per share of $2.84, well below estimates of $3.33. Zscaler forecast revenue of $2.61 billion, slightly below estimates of $2.62 billion.
In today’s stock market, Zscaler stock fell more than 8% to 177.50 during extended trading.
Zscaler has appointed a new Chief Revenue Officer, Chief Marketing Officer and other top salespeople as its go-to-market strategy undergoes major changes. Analysts have lowered consensus estimates due to the sales organization overhaul.
In the run-up to the publication of the Zscaler earnings figures, the cybersecurity share had fallen by 10% in 2024. Also, ZS stock had a relative strength of 69 out of a total of 99, according to IBD inventory check.
Zscaler provides cloud-based cybersecurity services through 150 data centers worldwide. Zscaler’s web security gateways inspect customer data traffic for malware.
Additionally, the Zscaler Private Access cloud service replaces virtual private networks to support remote work.
Zscaler competes with Palo Alto Networks (PANW) And Microsoft (MSFT) as well as the well-funded startup Wiz.
Meanwhile, Zscaler stock belongs to the IBD Computer-Software Security group, which ranks 150 out of 197 groups tracked.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
You might also like:
Do you want to trade options? Try these strategies
Follow IBD’s “Breaking Out Today” list for companies hitting new buy points
IBD Digital: Unlock IBD’s premium stock lists, tools and analysis today
Catch the next big winning stock with MarketSurge