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Zscaler Shares Rise as Company Issues Q1 Revenue Guidance and Analysts Lift Targets

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ZS$233.73 7.80%

Zscaler, Inc. (NASDAQ:ZS) released financial guidance for the first quarter of fiscal year 2027, projecting revenue between $935 million and $939 million. The cloud security provider also outlined full-year 2027 revenue expectations of $3.908 billion to $3.938 billion and annual recurring revenue ranging from $4.396 billion to $4.426 billion. First-quarter operating income is expected to reach $215 million to $217 million, with adjusted earnings per share forecasted between $1.15 and $1.16.

Chief Executive Officer Jay Chaudhry stated that expanding adoption of artificial intelligence is generating new revenue opportunities and efficiency gains while boosting demand for zero-trust security architecture. Growing security risks linked to AI agents are encouraging enterprise clients to strengthen their defenses. Following the company's Investor Day, analysts lifted price targets, with Citi raising its target to $245 and TD Cowen to $230, while Barclays modeled long-term annual recurring revenue reaching $8 billion by fiscal year 2031 alongside expanding cash flow margins.

Investors will monitor whether Zscaler can maintain its growth trajectory toward long-term targets while navigating evolving enterprise security needs. Market participants will also track customer deployment of zero-trust tools designed to address AI-related vulnerabilities.

Key points

  • Zscaler, Inc. forecasted Q1 FY2027 revenue of $935 million to $939 million and operating income between $215 million and $217 million.
  • Full-year FY2027 revenue is expected to reach $3.908 billion to $3.938 billion, with annual recurring revenue up to $4.426 billion.
  • Chief Executive Officer Jay Chaudhry noted that AI adoption and risks associated with AI agents are driving demand for zero-trust cybersecurity.
  • Analysts raised price targets following Investor Day, with Citi moving to $245 and TD Cowen reaching $230.

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Questions and answers

What is Zscaler's revenue guidance for Q1 FY2027?

Zscaler projects first-quarter FY2027 revenue between $935 million and $939 million, with non-GAAP earnings per share expected to land between $1.15 and $1.16.

What are Wall Street analysts predicting for Zscaler stock?

Following Investor Day, Citi raised its price target for Zscaler to $245, while TD Cowen raised its target to $230. Barclays modeled annual recurring revenue reaching $8 billion by fiscal year 2031.

How is artificial intelligence affecting Zscaler's business?

Chief Executive Officer Jay Chaudhry reported that AI adoption is driving efficiency and revenue, while risks related to AI agents are increasing demand for the company's zero-trust cybersecurity solutions.