Zscaler Stock Topples to 52-Week Low Despite Quarterly Strength

SentiSense · Published Mar 25, 2026, 11:30 AM ET · Updated May 13, 2026, 1:48 PM ET

Zscaler stock plummeted to its lowest level this year after two consecutive reports highlighting the stock's drop. Despite strong Q2 performance, the ZS stock has reached its year-to-date low due to recent negative headlines. Analysts may recommend buying the dip in Zscaler stock due to potential revenue growth opportunities.

ZS stock dropped 8% to hit a 52-week low of $140.56 on March 24, despite reporting Q2 fiscal 2026 results that exceeded expectations on both the top and bottom lines. Revenue came in at $815.8 million, a 26% year-over-year increase that topped the Street's $798 million estimate, while non-GAAP EPS of $1.01 beat the $0.89 consensus.

The disconnect between strong fundamentals and weak price action has puzzled investors. Multiple analysts cut price targets following the report, though the company maintains a robust 77% gross profit margin and annual recurring revenue grew 25%. Wells Fargo initiated coverage with an Overweight rating and a $200 price target, arguing the selloff has created a compelling entry point.

For Q3 FY2026, Zscaler guided for revenue of $834-$836 million and EPS of $1.00-$1.01, both marginally above consensus. The stock's weakness appears driven by broader rotation out of high-multiple cybersecurity names rather than company-specific concerns. Investors will be watching whether the adoption of Zscaler's newer platform capabilities can reaccelerate growth and restore market confidence.