Cybersecurity Vendor Zscaler's Stock Rises Premarket: What's Fueling The Upside?

2025-09-03 06:17:57

(MENAFN- AsiaNet News)

San Jose, California-based cybersecurity company Zscaler (ZS) reported a forecast-beating quarter, sending its stock more than 3% higher in Wednesday's early premarket session.

On Stocktwits, retail sentiment toward Zscaler stock remained 'extremely bullish' (94/100) as of early Wednesday, marking the highest in more than a year.

ZS sentiment and message volume as of 5:20 a.m., Sept. 3 | source: Stocktwits

The message volume on the stream increased to 'extremely high' levels.

Zscaler reported adjusted earnings per share (EPS) of $0.89 for the fourth quarter of fiscal year 2025, up from $0.72 in the year-ago quarter and exceeding the Fiscal consensus of $0.80.

Revenue climbed 21% year-over-year (YoY) to $719.2 million versus the $707.14-million consensus.

CEO Jay Chaudhry said,“We had an outstanding Q4, in which we achieved a new milestone of more than $3 billion of Annual Recurring Revenue while achieving our highest-ever operating margin for a quarter.”

The executive noted that the company's Zero Trust and artificial intelligence (AI) security solutions are driving robust demand.

“We recently delivered AI Guardrails for Public and Private apps, and we are rapidly expanding our AI security portfolio to address the emerging risks of AI models and applications.”

Looking ahead, Zscaler guided first-quarter adjusted EPS and revenue to $0.85-$0.86 and $772 million to $774 million, respectively. Both numbers exceeded the consensus estimates of $0.85 and $754.96 million, respectively.

The company's initial guidance for the fiscal year 2026 calls for adjusted EPS of $3.64 to $3.68 and revenue of $3.265 billion to $3.284 billion. Analysts, on average, estimate $3.71 and $3.231 billion, respectively.

Following the quarterly print, Barclays analysts raised the price target for Zscaler stock to $320 from $300, the Fly reported. The updated price target implies about 17% potential upside from Tuesday's close. The analysts maintained an 'Overweight' rating for the stock.

Zscaler stock is up more than 52% so far this year.

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