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    Zscaler (ZS) Is Down 5.1% After Issuing 2027 Guidance And Filing US$1.69 Billion Shelf Registration – Has The Bull Case Changed?

    Simply Wall St·09/04/2026 11:27:08
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    • Zscaler, Inc. reported its fiscal 2026 results on September 3, 2026, with fourth-quarter revenue rising to US$898.19 million and a quarterly net loss of US$3.37 million, alongside issuing fiscal 2027 guidance calling for US$3.91 billion to US$3.94 billion in revenue and US$4.40 billion to US$4.43 billion in ARR.
    • The company also filed a US$1.69 billion shelf registration for 9,783,264 common shares tied to employee stock plans, highlighting ongoing use of equity-based compensation as it pivots more resources toward AI-focused security offerings and broader Zero Trust adoption.
    • We’ll now examine how Zscaler’s double-digit fiscal 2027 revenue guidance and AI-focused product momentum influence its existing investment narrative.

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    Zscaler Investment Narrative Recap

    To own Zscaler, you need to believe its cloud native Zero Trust platform and AI security offerings can stay ahead of rivals as more traffic, users, and applications move off traditional networks. The latest fiscal 2026 results and double digit fiscal 2027 revenue guidance support that core thesis but also keep the key near term tension in focus: strong ARR growth versus persistent net losses and heavy AI investment. For now, the guidance does not materially change that balance.

    The US$1.69 billion shelf registration for nearly 9.8 million shares tied to employee stock plans is the most relevant new development here, because it connects directly to Zscaler’s heavy reliance on equity based compensation at a time when it is accelerating AI focused product investments. That supports the growth catalyst around AI security and Zero Trust Everywhere, but it also keeps equity dilution and earnings per share pressure squarely on the risk list for existing shareholders.

    Yet behind the upbeat AI and Zero Trust story, the potential impact of ongoing dilution on future per share outcomes is something investors should know more about...

    Read the full narrative on Zscaler (it's free!)

    Zscaler's narrative projects $5.1 billion revenue and $132.0 million earnings by 2029. This requires 17.1% yearly revenue growth and a $209.4 million earnings increase from -$77.4 million today.

    Uncover how Zscaler's forecasts yield a $196.95 fair value, a 11% upside to its current price.

    Exploring Other Perspectives

    ZS 1-Year Stock Price Chart
    ZS 1-Year Stock Price Chart

    Before this report, the most optimistic analysts were banking on about US$5.3 billion of 2029 revenue and improving margins, a far more aggressive path than consensus that could look either more achievable or more stretched once we fully weigh Zscaler’s new guidance against its dependence on long term, high spend programs like Z Flex and Red Canary driven AI security expansion.

    Explore 4 other fair value estimates on Zscaler - why the stock might be worth just $196.95!

    Form Your Own Verdict

    Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts.

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.