Zscaler: Golden Buying Opportunity

Zscaler, Inc. plunged 32% after Q3 earnings, despite beating consensus on both revenue and EPS, due to softer-than-expected revenue growth guidance for 2027 and higher AI CapEx. ZS posted robust Q3 results: $850.5M revenue (+25% Y/Y), 81% gross margin, $196M operating income (+33% Y/Y), and $136M free cash flow (+14% Y/Y). The ZS stock selloff was amplified by management guiding for a lower revenue growth rate of 16-17% in FY 2027 vs. market expectations of 19-20% growth.