Factor Model (net -0.2)
Factor Model
net -0.2 2.2 / 10Zscaler plunges 31.5% despite earnings beat
Watch: Next earnings release for updates on AI integration progress and sales recovery after leadership losses.
Zscaler shares plunged over 31.5% on May 27 after beating revenue and profit estimates but issuing weak FY2027 guidance and warning of a 2% rise in capex due to memory shortages and rising costs. The quarter saw two sales leaders depart, shaking market confidence. Despite strong AI spending announcements and analyst buy ratings across major firms, decelerating revenue growth and infrastructure costs pressure the outlook.
The sharp stock drop reflects investor concern over rising costs and cautious guidance, signaling potential growth headwinds that may undermine recent earnings strength and analyst optimism.
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