Zscaler Inc (NASDAQ: ZS) delivered a strong fiscal fourth-quarter performance, beating analyst estimates on both revenue and adjusted earnings while significantly raising its full-year outlook for fiscal 2027.

The cloud security firm reported fourth-quarter revenue of $898.16 million, surpassing the consensus estimate of $877.36 million. Adjusted earnings per share came in at $1.19, exceeding the projected $1.08. This result marks a decisive reversal from the cautious guidance issued three months prior, which had triggered a 31.5% single-day stock plunge.

Revised Fiscal 2027 Outlook

Management provided robust guidance for the upcoming fiscal year, signaling confidence in sustained demand for zero-trust security solutions. Zscaler projects fiscal 2027 revenue in the range of $3.91 billion to $3.94 billion. This represents a substantial upward revision from the preliminary forecast of 16%–17% growth cited in previous reports.

For the first quarter of fiscal 2027, the company anticipates revenue between $935 million and $939 million, against estimates of $927.02 million. First-quarter adjusted earnings are expected to be $1.15 to $1.16 per share, compared to the consensus of $1.08.

Full-year adjusted earnings guidance stands at $4.86 to $4.90 per share, well above current analyst forecasts of $4.60 per share.

Analyst Reactions and Price Targets

Following the earnings release, several major financial institutions raised their price targets for Zscaler shares:

• Needham: Mike Cikos maintained a Buy rating, raising the target from $180 to $215.
• Stephens & Co.: Todd Weller kept an Overweight rating, increasing the target from $200 to $225.
• Barclays: Peter Weed maintained an Overweight rating, lifting the target from $192 to $200.
• Scotiabank: Patrick Colville retained a Sector Outperform rating, boosting the target from $175 to $200.

Despite the positive results, shares fell 4.1% to trade at $170.56 on Friday, likely reflecting profit-taking after recent gains.

What the Numbers Show

The divergence between the initial cautious guidance and the final strong results highlights a rapid normalization in Zscaler’s growth trajectory. While earlier reports suggested a deceleration to 16%–17% growth, the actual Q4 performance and revised FY27 guide indicate that near-term headwinds were less severe than anticipated. The beat on both top-line revenue ($898.16 million vs $877.36 million estimated) and bottom-line earnings ($1.19 vs $1.08 estimated) suggests operational efficiency is holding alongside demand strength.

AI as a Strategic Tailwind

CEO Jay Chaudhry emphasized artificial intelligence as a primary growth driver, stating, "AI represents one of the most significant opportunities in Zscaler’s history." He highlighted the company’s ability to securely deploy AI agents and models without placing them on the network, addressing threats created by agentic AI.

Kalshi prediction market traders had previously bet heavily on management framing AI as a tailwind (62% probability). Specific technical mentions priced by traders include:

• MCP: Model Context Protocol trading at 56%, relevant to Zscaler’s AI Broker.
• Claude/Anthropic: Trading at 51%, reflecting the Project Glasswing partnership.
• Public Sector: Sitting at 45%, despite recent federal contract expansions.

Competitive Landscape

The competitive dynamics remain complex, with Alphabet Inc (NASDAQ: GOOGL) appearing as both partner and rival. Google trades at 23% for mention, while Wiz sits at just 7%. Nvidia, whose NeMo Guardrails integrates with Zscaler’s AI Guard, is mentioned at 17%. CrowdStrike Holdings Inc (NASDAQ: CRWD), a competitor that also integrates with Zscaler, trades at 15%.

Cantor Fitzgerald analyst Andres Sheppard has reiterated an Overweight rating on Zscaler (NASDAQ: ZS), maintaining a price target of $225. The broker’s stance reflects sustained confidence in the cybersecurity provider’s market position and growth trajectory.

The firm did not disclose specific financial metrics or operational drivers in this update. The rating and target remain unchanged from previous coverage.

Analyst Outlook

Sheppard’s recommendation suggests that Cantor Fitzgerald views Zscaler as undervalued relative to its $225 target. Investors monitoring the stock should note that no new earnings data or guidance was cited in this specific note.

• Rating: Overweight
• Price Target: $225
• Analyst: Andres Sheppard